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Greenwood, John Henry 


The theory and practice of 
trade unionism 












Greenwood, John Hcenryj 

The theory and practice of trade unionism, 
with a preface by Sidney Webb. London, 
Fifield, 1911. 

70 p. 18cm. (Fabian socialiEt ser., no. 9) 

1. Trade -unions - Gt. Brit. 










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The Theory and 
Practice ofTrade 
Unionism. Byj.H. 

Greenwood, Barrister. 
Preface by Sidney Webb. 




% • 




THE FABIAN SCX:iETY consists of men and women 
who are Socialists, that is to say, in the words of its 
" Basis/' of those who aim at the reorganization of society 
by the emancipation of Land and Industrial Capital from 
individual and class ownership, and the vesting of them in the 
community for the general benefit. . . . For the attainment 
of these ends the Fabian Society looks to the spread of Socialist 
opinions, and the social and political changes consequent there- 
on. It seeks to promote these by the general dissemination of 
knowledge as to the relation between the individual and society 
in its economic, ethical, and political aspects. 

The Society welcomes as members any persons, men or 
women, who desire to promote the growth of Socialist opinion 
and to hasten the enactment of Socialist measures, and it 
exacts from its members no pledge except a declaration that 
they are Socialists. 

The Society is largely occupied in the endeavour to discover 
in what way the principles of Socialism can be applied both to 
the political problems which from time to time come up for 
settlement, and to those problems of the future which are as 
yet rather political theory than actual politics. It holds fort- 
nightly meetings for the discussion of papers on such subjects 
by members and others, some of which are published as 
Fabian Tracts. 

The Society includes : — 

I. Members, who must sign the Basis and be elected by 

the Committee. Their subscription is not fixed ; 
each is expected to pay according to his means. 
They control the Society through their Executive 
Committee and at business meetings. 

II. Associates, who sign a form expressing general 

sympathy with the objects of the Society, and pay 
not less than los. a year. They can attend all except 
specially private meetings, but have no control 
over the Society and its policy. 
III. Subscribers, who must pay at least 5s. a year, and 

can attend the lectures. 
The monthly paper, " Fabian News," and the Fabian 
Tracts are sent as published to all three classes. 

Lists of Publications, Annual Report, Form of Application 
as Member or Associate, and any other information can be 
obtained on application, personally, or by letter, of 

The Secretary of the Fabian Society, 

3 Clement's Inn, Strand, London, W.C. 









The Fabian Socialist Series, No. 9 

• • •« 
• « « • • » • • 

• tf 

• . .' • 

• » 1 1 •< 

« • 

• • « / 

• *. 







Preface bv Sidney Webb 

Chapter I.— The Function of the Trade Union 

Discussion of Wage Theories and Competition — necessity for 
a "dyke" to protect the wage-earner from the full force of 

Chapter II.— The Chief Aim of the Trade Union . . i6 
Standard Wage and Normal Day— Piecework and Timework 
— " Ca-canny " — Women's Labour— Overtime. 

Chapter III.— The Justification of Trade Unionism . 26 
Are the aims of Trade Unions compatible with National 
Efficiency? — Restriction of Numbers — Common Rule — Indus- 
trial Parasitism. 

Chapter IV.— The Methods of Trade Unions ... 30 
Methods by which Trade Union aims are pursued— Collective 
Bargaining — Law of Supply and Demand— Restriction of Out- 
put — Mutual Insurance — Compulsory Trade-unionism. 

Chapter V.— Arbitration and the Minimum Wage . . 38 
Arbitration— Compulsory Arbitration— Living Wage. 

Chapter VI.— Some Misconceptions 
Unions Corrected 

Machinery — Vested Interest — Demarcation — ** Keeping 
Work in the •town;'** •: : ' ; 

Chapter VII.— The At't'iiEfft'iCEsmp SysTicm . 

Education— Pro- 

Apprent^cpsliip-^Bpy-'Llibdnr'— T^ljnical I 
ression in the Tradfc. ' * *: '. : r.* r * : 

Chapter VIII.— T»V:Fut.ure.o? Trade .Unions . 

Function in IriduSUriil. Adnnjnratration— Political Function- 
Trades Congress and Trades Counoili— The Labour Party. 

Chapter IX.— The Legal Status of the Trade Union . 
The Status of the Trade Union— The Osborne Judgment. 

Regarding Trade 42 









IN the following pages the reader will find summarised in 
convenient form the greater part of the ideas and many 
of the facts that my wife and I expounded in the thousand 
pages of Industrial Democracy, a ponderous volume which 
has, I fear, not found its way on to many workmen's 
bookshelves. I think that Mr. Greenwood has done the 
summarising very well, but he has naturally taken the 
analysis in his own way. He is entitled to his own views, 
and I must ask his readers not hastily to assume that all 
his statements and opinions are those of my wife and my- 
self. Indeed, those who are sufficiently interested in any 
particular point to doubt its accuracy, or to question its 
validity, will naturally feel boimd, before they pronounce 
judgment upon it, or before they quote it as ours, to look 
up exactly what stands printed in the History of Trade 
Unionism, or in Industrial Democracy itself. 

The subject is so important that I have no hesitation 
in commending this little book to every workman, every 
working woman, every Trade Unionist, and every Socialist 
in the English-speaking world. 

Trade Unionism, which has during the past twenty 
years grown enormously in membership and fimds, not 
in the United Kingdom only, but also in Germany, France, 
Austria, Italy, Belgium, Denmark, and the United States, 
calls more than ever for careful study by those concerned 
with the interests of the people. In the United Kingdom, 
indeed, it is scarcely too much to say that Trade Unionism 
in these years— as in 1824-5, 1867-76, and 1901-6 — 
stands once more at a crisis in its fate. The Trade Unions 
see their constitution and legal status impugned by the 


Osborne Judgment ; they find their attempts to cope 
with the employers very largely coimteracted by the 
increasing consolidation of the capitalist interests ; and 
they have to face the fact that the development of such 
Government measures as Sickness and Unemployment 
Insurance may, if not carefully safeguarded, seriously 
undermine the Trade Union position. On the other hand, 
the growing interest in social politics, and the increasing 
influence in Parliament, of the manual-working wage- 
earners as a class, and the constantly rising tide of Socialist 
thought, combine to produce an impression in some minds 
that Trade Unionism, as a social force, is becoming spent 
and antiquated ; and that it is destined, Hke " capitalism '* 
itself, to pass away as we advance towards a Co-operative 
Commonwealth. This impression is, in my judgement, 
profoundly erroneous. I believe that an organisation of 
the wage-earners by trades, and the maintenance of a 
strong and effective Trade Unionism, is (and must always 
continue) indispensable to a well-ordered Democratic 
State. So far from being injurious to the community, 
or restrictive of wealth-production, the Trade Unionism 
of this country has, notwithstanding many errors, by 
conunon consent among those at all competent to express 
an opinion, contributed greatly to its present prosperity. 
So far is Trade Unionism from being antiquated, or a spent 
force, that it remains, in my judgment, a vitally important 
agent for the maintenance of the Standard of Life. And 
so far is it, in my opinion, from being inconsistent with 
Socialism, or from being destined to pass away as we 
approach towards a Co-operative Commonwealth, that 
Trade Union organisation, as has been fully explained in 
Industrial Democracy, has a permanent part to play even 
in a completely Socialist community ; that is to say, where 
the land and all the instruments of production are owned 
and directed by the community itself. 

For these reasons Trade Unionism, with all its com- 
plications and difficulties, demands our most careful study. 
But just now, in England, this study has been made more 
than ever necessary by the Osborne Judgment, and by 
the campaign of education and agitation which must be 


maintained until Parhament has once more settled what 
position it means Trade Unions to occupy. 

What is the meanmg of the Osborne Judgment ? Trade 
Unionists have, during the whole two centuries that their 
organisations have existed, rehed on three different methods 
or instruments for establishing and enforcing those 
Common Rules in industrial relations, upon which de- 
pends any real maintenance of the Standard of Life. 
These three Trade Union instruments, which have cer- 
tainly not been more than have been needed to overcome 
the difficulties of the task, are the Method of Mutual In- 
surance, the Method of Collective Bargaining, and the Method 
of Legal Enactment. What the House of Lords has 
decided, in its judicial capacity as the final Court of Appeal, 
is that only the second of these methods or instruments 
(Collective Bargaining) is clearly lawful; that the first 
(Mutual Insurance) is only partially and constructively 
lawful; and that the third (Legal Enactment) is pro- 
hibited to Trade Unions, even if all their members desire 
to employ it. Trade Unions may submit to the legal en- 
actments presented to them by other organised social 
forces, but they must not themselves lift a finger in the 
matter. Thus, at one blow, the Osborne Judgment makes 
illegal— until Parliament shall have otherwise determined 
—at least one-half of the Trade Union activities described 
in our History of Trade Unionism and Industrial Democracy, 
and summarised in this volume. 

Unfortunately, the average newspaper writer, the 
" common or garden " Member of Parhament, and the 
ordinary workman apparently cannot get further on this 
matter than an impression that what the Osborne Judg- 
ment has prohibited is merely the levying on dissentient 
minorities of a compulsory contribution to the payment 
of '* pledge-bound " members of a Labour Party. But, 
in reality, the gravest part of the matter is not the Labour 
Party, which can take care of itself ; nor the " pledge- 
bound " candidate, for the so-called pledge is a futile 
absurdity which can quite well be dropped; nor the 
'• Parhamentary levy," which Payment of Members would 
at once make obsolete; nor the rights of dissentient 


minorities, which do not come in question either way, but, 
first and most important, the sudden and drastic and 
entirely unexpected destruction of the liberty of a Trade 
Union to do what it Ukes with its own money, so long as 
it does nothing unlawful ; and secondly, the express pro- 
hibition to a Trade Union to take any part in pohtical 
or ParUamentary proceedings, whether for or against any 
Factory, Mines, Railways, Shipping, Truck or other Act 
of Parliament whatsoever. 

How could the Law Lords come to such an extraordinary 
decision ? This is what it behoves all workmen, and es- 
pecially all Trade Unionists, to understand, in order that 
they may be able to explain to the average journalist or 
ParUamentary candidate exactly what has got to be put 
right. The fatal danger is that (as happened after the 
Taff Vale Judgment in 1906) the Trade Unions may be 
fobbed off with a mere patch on the legislative garment. 
They must insist on a complete new Parliamentary coat. 
Nothing short of a new Trade Union constitution will really 
protect them against the lawyers and the judges, who, good 
honest men though they be, are nearly all of them lament- 
ably ignorant of Trade Unionism, and, indeed, for the 
most part, a whole generation behind in .their economics. 

Now, the case of Osborne versus the Amalgamated 
Society of Railway Servants (in which one of the members 
of that Trade Union sought to restrain it from enforcing 
upon him a levy for the payment of the Labour Party 
Members of Parhament) came altogether before ten judges, 
and nine of them gave judgment in Mr. Osborne's favour. 
But they gave, for the most part, different reasons for 
their several decisions ; and it is accordingly not quite 
easy to discover what is the law. It so happens, however, 
that six of the highest judges, including a majbrity of the 
Law Lords, agreed in a series of propositions ; and it is 
this series of propositions (to the exclusion of the other 
opinions uttered by particular judges and not agreed to 
by the others) which must now be taken to be law. Any 
Trade Union doubting this fact runs the risk of being 
stopped by an injunction, and involved in costs, as soon 
as any recalcitrant member is put up (by some kind friend 


of Labour) to take action. This series of propositions may 
be expressed as follows : — 

1. That although Parliament has always avoided any 
explicit incorporation of Trade Unions, they must now, 
whether registered or imregistered, all be deemed to be 
corporate bodies, formed imder statute, and therefore 
no longer unincorporated groups of individual persons. 

2. That it follows by an undoubted principle of 
English law that any body corporate, formed under 
statute — even if its members are quite unaware of the 
fact — cannot lawfully do anything outside the pvu"- 
poses for which the statute has incorporated it, even 
if all its members consent. 

3. That as the purposes for which Trade Unions are 
incorporated have to be found somewhere authorita- 
tively stated, the definition of a Trade Union, wjiich 
Parhament incidentally enacted in the Trade Union 
Act of 1876, must be taken to enumerate accurately 
and exhaustively all the purposes which any group of 
persons faUing within that definition may, as a cor- 
porate body, lawfully pursue. 

4. That the payment of Members of Parhament, and, 
indeed, any pohtical action whatever, and therefore 
any support of or opposition to any bills in Parhament, 
not being mentioned in that definition as one of the 
lawful purposes of a Trade Union, and not being con- 
sidered by the judges incidental to any of the purposes 
therein mentioned, cannot lawfully be undertaken by any 
Trade Union, even if the Trade Union was formed, from 
the outset, with this object duly expressed in its original 
rules, even if the Chief Registrar of Friendly Societies 
has registered these rules, and even if all the members 
agree and continue to desire that it shall be carried out. 

This series of propositions is now law. You would do 
well to disbelieve anyone who casts doubt upon this fact. 
But even if the matter is in doubt, no Trade Union is safe 
until the doubt has been removed by a new Act of Parha- 

It is needless to point out that this declaration of the 


law stops much more than the Parliamentary levy. It 
makes illegal all expenditure on Trades Councils and the 
Trade Union Congress. It makes illegal all expenditure 
on education, whether for libraries, lectures, or scholar- 
ships. It probably makes all Funeral Benefits illegal, if 
not, too, all Superannuation Benefits. It makes it for 
ever impossible for any group of workmen of the nature 
of a Trade Union to do lawfully anything that Parliament 
did not authorise thirty-five years ago. Lord Halsbury, 
who so long filled the high office of Lord Chancellor, put 
the matter very plainly in his judgment, and every Trade 
Unionist should read his words. " What is not within 
the ambit of that statute," he said, meaning the definition 
clause of the Trade Union Act of 1876, " is, I think, 
prohibited both to a corporation and to a combination.** 
This means the destruction of that freedom to do as they 
chose, so long as they did nothing unlawful, which Francis 
Place and Joseph Hume won for Trade Unions in 1824, 
only to see it presently filched away again by the lawyers ; 
of that liberty to combine which Mr. Frederic Harrison 
and " the Junta '* of Trade Union leaders (see the History 
of Trade Unionism) again won for the Trade Unions in 
1 871 ; and of that " Freedom of Association '* which was 
conceded by the Liberal Cabinet of 1868-74, and still 
more ungrudgingly by the Conservative Cabinet of 1874-80, 
to be now suddenly destroyed by the Court of Appeal and 
the Law Lords. 

If the two and a quarter millions of Trade Unionists of the 
United Kingdom do not peremptorily insist that the House 
of Commons shall promptly put the matter right by a 
statute allowing Trade Unions the same freedom of combina- 
tion for any lawful purpose that is allowed to Joint Stock 
Companies — including, therefore, the right to employ 
their own agents in or out of Parhament for any lawful 
purpose, and to pay their own officers to sit in the House 
of Commons if they choose — they will show themselves 
unworthy of the rights that their fathers won for them. 

41, Grosvenor Road, Westminster, 
February ^ 191 1. 

Sidney Webb. 






UNTIL very recent times we were taught by the econo- 
mist that wages were paid out of the national capital, 
and that, while any attempt of one section of wage-earners 
to increase their earnings could only succeed by lowering 
the earnings of the other sections, an attempt on the part 
of the whole wage-earning class to add to their remunera- 
tion could never, in the long run, be successful. Success, 
even if achieved, would be short-lived, for the decrease in 
that portion of our capital devoted to the provision of 
raw materials and machinery, and other instruments of 
production, would, by lessening the demand for labour, 
inevitably produce a rapid and disastrous reaction. 

The theory of the " Wage Fund " is now abandoned, 
and with it must be abandoned all reasoned and unpre- 
judiced opposition to Trade Unionism. Wages, like other 
incomes, are now known to depend upon the amount of 
aggregate revenue of a community, and not upon the 
amount of its capital. According to Professor Marshall, 
" the labour and capital of a country, acting on its natural 
resources, produce only a certain net aggregate of com- 
modities, material and immaterial, including services of 
all kinds. This is the true net annual income or revenue 
of the country, or the National Dividend. ... It is 
divided up into earnings of labour, interest of capital, and 
lastly the producer's surplus or rent of land and all other 




differential advantages for production. It constitutes 
the whole of them, and the whole is distributed among 
them ; the larger it is the larger (other things being equal) 
will be the share of each agent of production." 

Under a system where perfect competition prevails, the 
benefits which that competition brings will be enjoyed by 
the consumer, and by the owner of rent ; rent including 
not only rent of land, but rent of all the superior instru- 
ments of production, rent of ability being by no means 
excluded. The normal rate of wages earned by any class 
of workmen is determined by the operation of a principle 
identical with that which determines the rent of land. 
Students of Ricardo will remember that the rent of any 
land is the difference between the yield of that land, and 
the yield of land which only just pays for cultivation and 
is therefore said to be "on the margin of cultivation." 
Similarly in any industry or branch of industry the wages 
of the whole class of workmen tend to be no more than 
can be got by the marginal man, that is, the last man 
whom it just pays the employer to engage. The difference 
between the earnings of any workman and the earnings 
of this marginal man tends to go to the consumer, and to 
the owner of rent. 

It thus follows, as Fleeming Jenkin pointed out, that 
unless the wage-earner takes steps to protect himself and 
to bargain as to his wages, he is, as regards the sale of his 
laboiu', in the position of one who sells goods by a forced 
sale, as in the case of bankruptcy. All classes of producers 
and distributors find their very existence depends upon 
their success in higgling and bargaining. The retail dealer 
bargains with the consumer, the wholesale dealer with the 
ret^uler on the one hand and with the manufacturer on 
the other, while the higghng which goes on perpetually 
between the captain of industry and his wage-earning 
operatives completes the chain. 

A few moments' thought will satisfy the reader that in 
each of these bargains one of the parties is, apart from 
artificial aids, very largely at the mercy of the other. The 
disinchnation of the consumer to pay half a crown for 
an article which he can get elsewhere for two shillings 



irresistibly impels the shopkeeping class to cut their 
prices lower and lower. But the retailer does not bear 
the whole of this pressure ; he endeavours to transfer it 
to the wholesale man with whom he deals. And the 
position of the retail man, with regard to the wholesale 
man, is very much the same as that of the consumer with 
regard to the shopkeeper. To the natural advantage 
thus possessed by the retailer, must be added the advantage 
which his knowledge of the retail market and of the con- 
sumer's tastes gives him. The result is that the members 
of the wholesale class are always in danger of being worsted 
in the struggle which they ceaselessly wage with the re- 
tailing class. The wholesale man is, however, on firmer 
ground when he comes to deal with the manufacturer. 
He knows better than the manufacturer what the con- 
sumer wants, and he does not hesitate to trade on the 
manufacturer's comparative ignorance. The latter, un- 
mersed in the details of organisation and the management 
of men, does not possess in nearly so high a degree that 
bargaining skill which is the middleman's only means of 
existence, and he is more anxious to sell than the middle- 
man is to buy. The manufacturing class are loud m their 
complaints of the cutting of prices to which they are 
forced to submit at the hands of the merchants, and 
they quite naturally endeavour to lessen the pressure on 
themselves by transferring it to other shoulders, namely, 
those of their operatives. The workman's ignorance of the 
state of the market and of the real demand for his services 
as contrasted with the employer's more certain knowledge ; 
his defective bargaining capacity pitted against the em- 
ployer's skill in this particular kind of bargain; his 
eagerness to be employed, in face of the employer's com- 
parative indifference ;— all this places him in a position of 
hopeless weakness, of which the employer, urged by the 
competitive pressure from above, is not slow to avail 

himself. , 

Against the pressure thus created by the consumers 
not unnatural and not necessarily reprehensible desire for 
cheapness each of the classes referred to has provided 
itself, or is provided by nature, with the means of pro- 



tection. It is only necessary to enumerate them for their 
existence and effectiveness to be recognised. They in- 
clude adulteration, misrepresentation of quality, the plac- 
ing on the market of proprietary articles for which a 
demand has been created by advertisement, rings and 
combines, resort to the patent laws, the obtaining of such 
statutory monopolies as are granted under private Acts of 
Parliament to railway companies, gas and water companies, 
and tramway companies. How extensive is the protection 
secured to the manufacturing and kindred industries by 
this last-named method may be judged from the estimate 
that more than one-quarter of the capital of this country 
(not including land and buildings) is invested in such com- 

And now, seeing that the retail dealer, the wholesale 
dealer, and the manufacturer have all succeeded in building 
up around themselves bulwarks or dykes which, more or 
less effectively, protect them from being swept away in 
the rush of competition, we may, without arguing the 
question, assume that the wage-earner is also entitled 
to a "dyke" which will break the force of that com- 
petitive stream against which he is for ever striving. 

To a certain extent he is protected by what wfe may call 
a natural provision. In the normal man there is a tendency 
to cling to his established standard of comfort — to that 
mode of life to which he is by birth and training accus- 
tomed — and this chnging is all the more tenacious, because 
it is unreasoning and often sub-conscious. The agricultural 
labourer who is reputed to " live " on 12s. per week revolts 
instinctively at the thought that he should eat and live 
as a Chinaman does. The engineer, accustomed to regard 
36s. per week as a proper wage for men of his trade, al- 
though he might ultimately be forced by starvation to 
accept 15s. per week for doing engineer's work, would, 
when such an offer was first made to him, recoil from it, as 
an affront to his manhood. 

This feeling is found in Trade Unionists and non-Unionists 
alike, and in trades where no combination exists. It 
extends even to hours of labour— thus, to take the building 
trade as an example, no man in that trade would consent, 


under any pressure, to work constantly for fifteen hours 
a day. Mill said : " Where there is not in the people, or 
in some very large proportion of them, a resolute resist- 
ance to this deterioration — a determination to preserve 
an estabhshed standard of comfort — the condition of the 
poorest class sinks, even in a progressive state, to the 
lowest point which they will consent to endure." 

The existence among any class of workmen of a conmion 
notion as to what constitutes a subsistence, and a deter- 
mination to have this or nothing, is a tacit combination — 
a sort of universal strike, and where any class of workmen 
are strongly imbued with some such common notion of a 
standard of comfort, a great advantage is thereby given to 
that class in their bargaining with the employer. 

But the natural " dyke " which this tacit and instinctive 
combination amongst workmen constitutes is defective in 
the following respects : — 

1. Owing to the absence of any material support to the 
workers' stubbornness it is necessarily weak, and, under 
exceptional pressure, usually gives way. 

2. Owing to the absence of deUberate concert it cannot 
be raised when the pressure of bad times is reUeved, and 
it thus tends to become lower and lower. 

3. The indefiniteness of this instinctive Standard of Life 
enables the employer to select the lowest standard and 
beat down the whole class gradually to that level. 

Nevertheless, the instinct has never died. Perhaps it 
can, in Enghshmen, be no more destroyed than can the 
instinct for liberty itself, and just as the clinging of the 
middle-class and aristocratic Whigs in Stuart times to 
the tradition of liberty resulted in our political constitution 
as we now know it, so the Whigs of the working class, 
urged on by this unconquerable desire for a decent Standard 
of Life and comfort, slowly, laboriously, and painfully 
brought into existence the Trade Union Movement. 

With the Trade Union to guide him, the workman's 
notion of a desirable Standard of Life acquires a certainty 
and a definiteness through being expressed in terms of a 
precise and uniform demand for a Standard Rate of wages, 
a normal working day, and satisfactory provisions for 



sanitation and safety. The Trade Unions, out of funds 
accumulated in good times, can, when trade is bad, by 
the grant of out-of-work pay, place their members beyond 
the necessity of accepting less than the Standard Rate of 
remuneration. By placing at the disposal of their members 
expert knowledge of trade affairs, and a high degree of 
bargaining skill, they can, whenever the circumstances 
of trade warrant it, bring about a positive raising of the 
Standard of Life. 

Finally, by their influence on the Legislature, the Trade 
Unions can procure the passing of factory and other Acts, 
which secure absolutely from attack one element after 
another in the worker's standard of life. 


WHERE workmen have organised themselves for the 
purpose of protecting from attack their existing 
Standard of Life, they first aim at estabhshing within their 
trade a Common Rule, that is to say, an agreement amongst 
the members of that trade as to the terms on which they 
will accept employment, and an understanding amongst 
them that no one shall engage himself on terms less favour- 
able than these. 

The most important factor in the workman's Standard 
of Life is, of course, his wages ; and Trade Unions have, 
from the first, concentrated their powers on attempts to 
secure and maintain in their trade a Standard Rate of wages 
below which no member of the Union is expected to work. 
There are two common errors concerning the idea of a Stand- 
ard Rate of wages which should be corrected at the outset. 

I. The setting up of a Standard Rate does not mean an 
attempt to establish a dead level of equality of payment 
amongst the workers in the trade to which the standard 
applies; in other words the minimum wage is not, in 
theory, necessarily a maximum, nor is it so in fact. Thus 


the Chief Inspector of Factories in Victoria, writing in 
1902 of the results achieved by the Wages Boards instituted 
in that colony under an Act of 1896, said that in the 
clothing trade the minimum wage for adults was 
45s. shillings a week for males, and 20s. for females, while 
the average rates actually paid were 53s. 6d. and 22s. 3d. 
respectively. Similar differences were found to exist in 
the boot, furniture, and shirt-making trades. 

In many of the trades in England where the operatives 
are well organised it is a well-known fact that the em- 
ployers offer a higher rate of wages to men of special skill, 
— and no objection to this practice is made by the Unions. 
The agreement between the Operative Stone-Masons and 
the London Central Master Builders' Association, and 
that between the Amalgamated Society of Tailors in 
London and the Master Tailors' Association are other 
examples in point. In fact, it will be difficult to find in 
this country a Trade Union which forbids its members 
to receive more than the Standard Rate or even dis- 
courages such a practice. 

2. The distinction between wages and rate of wages 
must be kept clearly in mind. A uniform Standard Rate 
of wages in a trade does not mean equality of wages, even 
when it results in equality of rate of payment. The great 
majority of Trade Unionists — among them may be men- 
tioned the Ironworkers, Steel Smelters, Coal Miners, 
Cotton Workers, Tailors, and Boot Makers — are engaged 
by the piece. The Standard Rate insisted on by these 
is not a definite sum per hour, but a list of piece-work 
rates. Clearly then in these cases the existence of a 
Standard Rate does not, with regard to the amount of 
wages received, put the skilful and industrious workman 
on the same level as the inefficient idler. 

Even when the Standard Rate is a time-work rate, 
equahty of remuneration is not implied. In the Plumber's, 
Bricklayer's, and Mason's trades, and in many others, 
skilled work is paid more highly than ordinary work ; and 
firms doing high-class work attract the best class of work- 
men by offering a higher rate of pay. In other firms, 
though the men may all receive the same rate of pay and 



the same wages, the superior workman gets the more 
agreeable and responsible work, and enjoys a greater 
measure of freedom from supervision. It must, however, 
be admitted that a Standard Time-work Rate does result 
in a nearer approach to uniformity than a Piece-work 
Rate. Nor can it be denied that there are those who think 
that the slow workman is, in equity, entitled to as much 
as the quick one, where both are equally conscientious 
and industrious. But Trade Unionists, as a body, have 
no fundamental objection to piece-work. More than 
sixty per cent of them insist upon it, and of the remainder 
quite one-third recognise both piece-work and time-work. 
There is thus only a small minority of the total number 
of organised workers who are pledged to the maintenance 
of the system of payment by time. 

These differences in method of remimeration are due not 
so much to differences of Trade Union policy as to differences 
in the nature of the operations performed. All the Unions 
enumerated aim at uniformity in the rate of remuneration, 
but in some of the trades, the Cotton Spinning trade, for 
example, there is a constant tendency to " speeding up," 
which cannot always be detected by the operative. In- 
deed, the increase of speed, though appreciable after a 
time, is often imperceptible during any short period. If, 
therefore, the payment were by the day or the hour the 
employer would be in the enjoyment of an ever-increasing 
output, while the workman would find himself called upon 
to submit to an ever-increasing intensity of strain without 
any corresponding increase of remuneration. A constant 
readjustment of time-rates which would keep pace with 
the " speeding up " is clearly a practical impossibility ; 
but by insisting on being paid according to the amount 
of yam spim, the spinning operative, as well as the mill- 
owner, gets the benefit of any increasing speed. Similar 
considerations apply to weaving. 

In the coal trade the employers, finding it impossible 
to exercise an effective supervision over the coal hewers, 
resorted to the " butty system." The " butty man " is 
a contractor in a small way, who agrees with the employer 
to hew out a certain quantity of coal for a definite sum, 


employing his own men, and paymg them by the day. 
The '• butty man," working with all the strenuousness 
of the piece-worker, sets the pace for all the members of 
his gang, who are thus in reality working at piece-work 
intensity, while they only receive time-work pay. Such 
a system is nothing less than a fraud upon the workmen 
concerned, and to prevent such a fraud the Miners' Unions 
now usually insist upon piece-work rates for all hewers. 

In other trades the insistence on payment for time is 
found to be more effective than piece-work lists for the 
protection of the Standard Rate. In the Engineermg 
trade there is so great a multipUcity of kinds of work that 
where piece-work prevails a new contract has to be made 
for each job. As this contract must, of necessity, be left 
to the foreman and the individual workman. Collective 
Bargaining becomes impossible, and the door is at once 
opened to the dangers of individual bargaining. Indeed, 
the Amalgamated Society of Engineers hold that the 
system of setting a special price for each job is not a 
bargain at all. but a price dictated by the employer and 
lowered by him at will. Another difficulty is that the 
time and labour necessary for each job cannot, with cer- 
tainty, be estimated beforehand, and it is thus difficult 
to ensure that the workman will always receive the same 
earnings for the same effort. 

Among the Carpenters, Plumbers, Stone-Masons, and 
Bricklayers piece-work seems to be equally inconsistent 
with the success of Collective Bargaining. 

In some trades both piece-rates and time-rates are in 
operation. With the Compositors, though there are many 
varieties of work, these are more capable of precise enumera- 
tion than is the case in the Engineering trades. Piece- 
work lists are thus possible, and Collective Bargaining is 
not endangered by piece-work. On the other hand, the 
nature of the Compositors' work is such that it is little ex- 
posed to the risk of being " speeded up " by machinery or 
a too-zealous foreman, and so time-work is not objection- 
able. Straightforward setting up is often done by the piece, 
while corrections and special jobs are done by the time. 
The Boilermakers and Iron Shipbuilders insist on piece- 


work rates for the building of new ships, but when re- 
pairing is being done time-rates must be paid. 


Some Unions have attempted to fix not only a minimum 
money wage, but also the maximum amount of work to be 
done for it. Restrictions of this kind are, however, rare, 
and are mostly due to a desire to prevent individual work- 
men from under-bidding their fellows, by undertaking to 
do more work in an hour for the same pay, thereby under- 
mining the common rule of the trade. At one time it 
was not uncommon for employers to bribe particular 
workmen with beer or increased pay to work at excep- 
tional speed in order to " pull on " the other workmen, 
and the " Ca* canny" device was probably a counter- 
stroke to attempts of this kind. 

But these attempts to restrict output may easily de- 
generate into a fraud on the employer who, in agreeing 
on a time-wage, has contracted for labour at an all-round 
rate, assuming that the quick man will make up for the 
slower one. It can only, if ever, be justified where the 
employer has notice of the diminished energy being put 
forth. Considered from the point of view of individual 
and national character, it cannot be denied that systematic 
loitering is demoralising and its practice is utterly indefen- 
sible, and all responsible Trade Union ofl&cials denounce it. 

The discussion of a Standard Rate would not be com- 
plete if it did not include a consideration of the question 
of Women's Labour. The old-time objection of men to 
the entrance of women into their trade, was due, in part, 
to a moral prejudice against a mingling of the sexes, and, 
in part, to the fear of a new class of competitors who might 
supply labour to the employers at a cheaper rate than 
the men. Woman has, however, established herself in 
the labour market, and this fact must now be taken 
account of by the Trade Unionist. Certain Trade 
Unions which have adapted themselves to the new 
state of things seem to have found that where men and 
women work in the same trade there need not be any 
competition between the sexes. The Lancashire Cotton 


Weavers have a piece-work list of prices to which both 
men and women must conform. It is found that in the 
majority of cases the women engage themselves at light 
work for which the rates are lower, while the men work 
at the heavier tasks where higher rates prevail. But a 
woman with exceptional strength who is capable of doing 
the heavy work may do it, and where this is the case the 
Unions insist that she shall be paid at the higher rates 
as though she were a man. 

Such a provision, besides being in accordance with the 
demands of simple justice, effectually checks any attempts 
on the part of employers to use the woman as a means 
for bringing down the man's rates. On the other hand, a 
weak man, unable to do the heavier work, may obtain 
employment at the women's looms at the lower rate. 
Similar arrangements obtain in the Hosiery trade. 

The prevalence of such arrangements would seem to 
suggest that in the industrial world the equality of the 
sexes is not recognised. Women constitute a distinct class 
of workers, having different faculties, different needs, and 
different expectations. The Common Rules regarding 
wages, hours of labour, and other conditions, by which men 
maintain their own Standard of Life, are unsuited to 
women, and nothing but harm to the women can result 
from attempts to set up a uniform standard for both sexes. 
Where such a uniform standard prevails one of two things 
will happen. Either the woman will find herself entirely 
shut off from the possibility of employment, or she \yill 
retain her position only by super-womanly exertions which 
must prematurely wear out her strength and leave her in 
middle Ufe of Uttle use either to herself or to the community. 

Undoubtedly there are callings in which men and women 
do work of exactly the same kind, and in which the women 
are as capable as, it may be more capable than, the men. 
In such trades and professions the Standard Rates must, 
in justice, be equal — where masculine capacity is inferior 
to feminine the masculine rate should be lower — but in 
all cases there must be absolute freedom for an excep- 
tional member of either sex to accept work at the higher 
rates appropriate to ordinary members of the other sex. 


Although the ideal of each Trade Union is a Standard 
Rate which shall prevail in the trade throughout the length 
and breadth of these islands, there is, in fact, a wide diver- 
gence with locahty. To take a single example : Among the 
783 branches of the Amalgamated Society of Carpenters 
there are as many as 20 different rates of payment, ranging 
from 5d. an hour in Truro to lojd. an hour in London. 
Employers in out-of-the-way districts will often contend 
that on accoimt of inferior machinery and heavy freight 
charges they are unable to pay so well as other employers 
who are more favourably situated, and that the workmen 
should be content to accept lower rates. On general 
grounds such a contention appears to us to be unreasonable. 
The best interests of the community are, in the long run, 
served by each industry being carried on in those places 
and under those conditions which most favour a system 
of high productivity, coupled with economy. For an 
employer to rely on those drawbacks and inconveniences 
of his position which are avoidable as an argument for 
reducing wages seems to us no less than a demand that 
the industry in which he is concerned should be subsidised 
out of the bounty of his workmen. The powerful and highly 
organised Unions of Lancashire as a rule refuse to make 
allowances for imperfect and old-fashioned machinery, and 
even demand higher piece-rates for the men who work it. 
In so doing they are, apart from the protection afforded 
to their members, promoting the best interests of the trade 
as a whole by the stimulus which they thereby give to in- 
dustrial improvements. As a result of such a policy 
business tends to be driven into those establishments which 
are most favourably situated, best equipped, and most 
ably managed, while the incompetent and old-fashioned 
employer is eliminated. 

It must, of course, be admitted that this policy must 
not be pressed too closely or too far, for although the closing 
of small and badly managed estabhshments and the ab- 
sorption of their business by the rest is ultimately ad- 
vantageous to the industry and to the nation, the disloca- 
tion and disturbance of the Hves of the workpeople is an 
immediate evil which cannot be ignored. 


In fixing a Standard Rate of wages in any trade the 
only fact of which account can be taken (on grounds that 
are theoretically justifiable) to estabUsh different rates m 
different locaUties is the difference in the cost of livmg. 
Such a difference, in practice, nowadays resolves itself very 
largely, if not entirely, into a difference of house-rent, and 
it is difficult to take exception to the practice of certam 
Trade Unions which, on this ground, fix the rate tor 
London ten per cent higher than the provincial rate. 

The maintenance of the Standard Rate involves other 
matters besides the arrangement of piece-work lists and 
hourly rates of wages. There are various ways m which 
it is possible for an employer, while ostensibly agreeing to 
a Standard Rate of wages, to diminish appreciably the 
workman's real earnings. Such devices as deductions lor 
materials and in respect of spoilt work, charging of loom 
rents in the Weaving trade and frame rents m the Hosiery 
trade, the imposition of fines, and attempts to pay the 
workman in kind are often resorted to, arid they are 
resented and resisted by Trade Unionists with the same 
jealousy as direct reductions of wages. 

Of ahnost equal importance with the maintenance of the 
Standard Rate is the maintenance of a Normal Day. In 
the case of those who are paid by the day it is obvious 
that the number of hours to be worked in a day is as 
essential a part of the wage bargain as the amount of the 
dav's wage, and even in the case of piece-workers long 
hours of labour are found to have a depressing effect on 

the wage-rate. , . , r 1 i_ 

The first demands for a limitation of the hours of labour 
came from those trades which were entirely dependent on 
the use of machinery. In the trades where the use of 
expensive machinery and a high degree of mdustnal 
organisation prevail, definite hours of commencing and 
finishing work each day are an absolute necessity, but it 
is in precisely these trades that the stram on the operatives 
of persistent and regular effort is most intense. Thjis at 
a very early period we find the Textile-workers and the 
Miners agitating for and obtaining a Normal Workmg Day 


fixed by legal enactment. In the Building and Engineer- 
ing trades a change in the same direction of improved 
orgamsation and mcreased dependence on machinery has 
after a succession of serious strikes, led to a similar limita- 
tion of the working day. 

In all trades there is a perpetual conflict between the 
desire of the workman for more leisure and his desire for 
greater eammgs. The latter desire being the greater, it 
might be supposed that in the trades where piece-work 
prevails, an mcrease in the hours of labour would mean 
an mcrease in the amount earned ; and the same result 
might reasonably be expected even in those trades where 
payment by time is the rule, if extra pay is given for extra 
hours worked But Trade Unionists beheve that irregular 
and unlimited hours affect injuriously both the Standard 
Kate and the amount earned per man. This conclusion is 
drawn from actual experience. Official statistics and the 
evidence given before Royal Commissions show that long 
and uregular hours ahnost invariably coincide with low 
rates of pay and small weekly earnings. The practical 
Irade Unionist works out the connection somewhat in this 
way : The workmen in a certain trade may look upon 
30s. as a fau: week s wage, and one which will enable them 
to enjoy those necessities and comforts to which they are 
by trainmg and tradition, accustomed. If the hours of 
labour are mcreased from 54 to 60 per week, the rate of 
wages remaining the same, they now earn 33s. 4d. per week. 
Presently the wages are reduced by 10 per cent ; the men 
grumble, but as they can still make 30s. a week they prefer 
to give way rather than strike, though they would have 
stnick at an attempt to reduce the original 30s. to 27s. 
Alter a time the weaker men are unable to keep up their 
former output for such long hours, and this is made an 
excuse for a further reduction. 

The effect is the same where the men work by the piece 
Piece-work rates, no less than time-work rates, are based 
on the customary Standard of Living which both employers 
and employed tacitly recognise. Where there is no ^nit 
to the number of hours that may be worked the excep- 
tionally strong and able man may make earnings far above 



those customary in his trade. The employer, anxious to 
secure the adoption of a lower piece-rate, points to the 
earnings of such men as showing how much can be earned 
in the trade. These exceptional men will probably prefer 
to accept a lower rate rather than lose everything in a 
long strike. Thus the hours which the exceptional man 
can work tend to become the hours of the whole trade, 
and the piece-work rates are lowered so as to yield for 
the longer working week no more than the customary 
livelihood. On these grounds Trade Unionists are driven 
to insist on a Normal Day, not so much on account of the 
necessity for leisure and rest as to prevent workmen being 
forced to supply an ever-increasing amount of energy in 
return for a minimum subsistence. 

In addition to this evil of a lowering of the Standard 
Rate must be mentioned the injury to national health and 
character which results when large numbers of citizens are 
deprived of proper opportunities for rest and recreation. 
A moral reaction inevitably follows on an excessive physical 
or mental strain, maintained during prolonged periods, and 
in districts and trades in which overtime constantly pre- 
vails the workers are found to be unmistakably inferior, 
both in morality and inteUigence, to their fellows in the 
better-regulated trades. 

A further argument against overtime is supplied from 
the experience of two generations of Factory Inspectors. 
It is a common arrangement in the trades where a Normal 
Day has been fixed by legal enactment to permit the 
employer in times of emergency to work overtime. But 
though, at first sight, such an arrangement may seem 
reasonable, it is utterly condemned by practical results. 
The concessions made to the employer's requirements 
have been found to destroy the efficacy of the law, and in 
each new Factory Act we see a narrowing of them. The 
officials responsible for the carrying out of the Acts are 
convinced that no rule of an uncertain nature can be 
maintained, and that no limitation of hours of labour can 
be enforced unless the hours of work are definitely pre- 
scribed. Regiilations which permit overtime make it im- 
possible to maintain the Normal Day, by giving an unfair 


advantage to unscrupulous employers and lessening the 
effectiveness of factory inspection. 

Where hours of labour are not regulated by Statute 
it is usually a term of the bargain entered into between 
the employer and the Trade Union that extra rates shall 
be paid for overtime work. Experience, however, shows 
that the extra rates do not effectively protect the Normal 
Day. In some trades (especially the Engineering and 
Shipbuilding trades) the employers have systematically 
worked their men on overtime one or two hours a day for 
months at a stretch. 

Moreover, the tendency to lower the ordinary rates is not 
long in manifesting itself, for the less scrupulous em- 
ployers, in urging a reduction in rates, will point out to 
their men the possibiUty of compensating themselves for 
the reduction by working overtime. 

But the most evil result of overtime is seen when trade 
begins to slacken. At such times employers, in order to 
lessen the standing charges for rent, interest on capital, etc., 
concentrate the work done into as short periods as possible 
by extensively resorting to overtime. With their rates of 
wages falling workmen are tempted to make up their 
earnings by complying with the employer's demand for 
increased hours of labour. Thus at those times when the 
demand for labour has a natural tendency to diminish, 
the resort to overtime will, by still further lessening the 
call for men, accentuate the e^al of unemployment. 


TRADE Unionism must be judged, not by its results 
in improving the position of a particular section of 
workmen, but by its results in permanently raising the 
efficiency of the nation as a whole. Each device and 
regulation of Trade Unions must be subjected to this 
test : Does it promote the selection of the most efficient 



factors of production, whether capital, labour, or brains, 
or does it promote a lower type of organisation, lessening 
the capacity and degrading the character of the manual 
and mental workers ? One device of Trade Unions formerly 
in great favour, the device of Restriction of Numbers, fails 
to satisfy this test. This device usually took the form of 
stringent apprenticeship regulations. Not only was the 
proportion of apprentices to journeymen in a trade sub- 
jected to definite limitations, but in many cases only the 
sons of journeymen and other favoured persons could be 
received as apprentices, while no one was recognised by 
the Union as a journeyman who had not served the full 
period of apprenticeship. 

It is now seen that any hmitation of the persons who 
may be employed in a trade must lower the efficiency of 
that trade, and for the following reasons : i. The area of 
selection is narrowed. 2. The men ah-eady in the trade 
gradually deteriorate when the incentive of fear of loss of 
employment is removed, for it is this which, in a great 
measure, keeps them efficient and regular. 3. Any con- 
siderable growth in the number of skilled workmen is 
checked, and so expansion of industry becomes impossible ; 
hence the enterprising employer is discouraged, while 
sleepy management and obsolete plant become common. 
4. The price of labour is raised without any compensating 
increase in its efficiency. 

The Trade Union device of a Common Rule is one which 
will stand the test. By the Common Rule is meant the 
enforcement of a minimum standard of labour conditions 
below which no employer may descend, though not the 
fixing of a maximum above which no employer may rise. 
It does not eliminate competition. It merely transfers 
the pressure of competition from price to quality ; for if 
the employer must not pay less than a certain wage he 
will naturally select the best man. Competition amongst 
the men ceases to be an under-bidding of each other in 
respect of wages, and takes the form of attempts to out- 
rival one another in skill, sobriety, regularity, responsi- 
bility, and initiative. Amongst the employers the Comnion 
Rule stimulates invention and improvement in organisation 


and processes of manufacture ; for when they can no 
longer increase their profits or encounter the rivaky of 
their fellows by cutting down wages, they are compelled 
to rely on such improvements. 

But apart from these considerations, the successful 
attempt of the workman to secure for himself a Standard 
Rate of wages and a limitation of the hours of his labour 
has indirect results of great value. The more regular, more 
comfortable, and healthier mode of life which follows the 
establishment of a Standard Wage and Day ultimately 
brings about an increase in efficiency which more than 
compensates the employer for the concession which he has 
been called upon to make. The success of the agitation 
for better pay and a shorter working day has not, as was 
predicted, ruined industry, but has, on the contrary, con- 
tributed in no small degree to the progress of the last half- 

It must, however, be admitted that the benefits resulting 
from the adoption of the Common Rule come slowly, and, 
for a time, may be masked by more direct consequences 
which are not beneficial. A rise of prices is one example 
of such. Moreover, it is not safe to assume that the cost 
of every improvement in the condition of the operatives 
is compensated for by a corresponding increase in their 
efficiency. As in all other classes of investment, the Law 
of Diminishing Returns operates, and in each trade a point 
must finally be reached at which any additional expendi- 
ture in respect of wages and the improvement of labour 
conditions will yield a less than corresponding increase of 

There is, however, little fear that we have, in any of our 
trades, reached this point, though, of course, the economic 
and industrial benefits hkely to follow from any raising of 
the Standard of Life will, for a given cost, be greater in 
those trades where the present standard is low than in 
those with a comparatively high standard. 

In this connection the effect of Trade Unionism on 
Industrial Parasitism should not be lost sight of. Amongst 
the parasitic trades must be included those trades in which 
women are largely employed at wages insufficient for their 


support, and who are therefore partly dependent on their 
parents or husbands. 

Trades which employ large numbers of unskilled boys 
and girls who live with their parents, and work for a sum 
insufficient to cover the cost of their support, are also 
within this class. Even if the wages are sufficient to pay 
for food, clothing, and lodging, such trades are parasitic 
on the community if the boys and girls are not trained 
for a trade which they can follow on reaching maturity. 
An industry which cannot both maintain its existing 
operatives in health and efficiency and also contribute its 
due share of recruits to the industrial army, is being carried 
on at the expense of the community. Then there are the 
trades in wluch the wages of adult males are too low to 
maintain physical efficiency, or in which the conditions of 
work are dangerous or insanitary. Such trades are using 
up the vigour, intelligence, and character of the operatives 
without renewing them. They take out of the workers 
more than the wages they pay can restore. The difference 
is made up by the community as a whole in the form of 
poor rates, charitable contributions, charges for the up- 
keep of lunatic asylums, hospitals, prisons, and in an 
unnecessarily high death-rate. 

There is going on in this country a competition between 
trade and trade as keen as that which is waged between 
country and country. In this competition those trades in 
which a Common Rule has been established are expanding 
steadily, reducing prices and improving the quality of the 
goods or services supplied, while the parasitic trades are 
constantly growing up and disappearing, keeping their 
footing for a time by reason of the undue cheapness of 
their products. The regulated trades, however, bring cer- 
tain advantages to the unregulated ones. They supply 
them with ready-made appliances and tested inventions, 
and they improve the national stock of wage-earners from 
which both regulated and imregulated trades draw their 
recruits. But though these causes prolong the lives of the 
parasitic trades, there can be little doubt that as the use 
of the Common Rule grows, so will parasitism diminish. 

No stronger proof of the benefit which follows from the 






enforcement of a Common Rule could be found than that 
supplied by the enonnous expansion during the last sixty 
years of the Textile, Shipbuilding, Machine-making, and 
Coal-miners* trades — the trades in which, either as a result 
of Collective Bargaining or Legal Enactment, the Common 
Rule is most firmly established. 

Agriculture, on the other hand, furnishes a striking 
example of the decline of a trade which, though not 
parasitic, is entirely unregulated. The agricultural 
labourer is hired for practically a bare subsistence. There 
is no limit to his hours of work, and little or no provision 
exists for his comfort and convenience. This Low Stan- 
dard of Life means a low standard of work. The employers 
have troubled themselves less than any other class of 
employers about inventions and improved processes, and 
their only resource when times are bad is to look to the 
landlords for a remission of rent. 


AT the present day. Trade Unions seek to achieve 
their purpose rather by Collective Bargaining than 
by Legal Enactment. We have seen that when the con- 
ditions of employment are left to free competition, they 
are settled by individual bargaining between parties of 
very unequal economic strength, and the settlement arrived 
at tends to the worst possible conditions of labour for 
the mass of the workers, who are in constant danger of 
being forced down to the bare subsistence level. From 
this assumption springs the notion of the necessity of a 
Common Rule, that is to say, an understanding amongst a 
number of wage-earners as to the conditions on which 
they will accept work from an employer or employers, and 
an undertaking on the part of each one not to sell his 
services on terms less favourable than those agreed upon. 
Collective Bargaining, as conducted by Trade Unions, 

is nothing more than a higgling of the market, such as 
the ordinary business man constantly engages in, and its 
success is therefore dependent upon the strength of the 
strategic position occupied by those who higgle on behalf 
of the workmen. It has therefore always been a principal 
aim of the Trade Union leaders to secure for themselves 
this favourable strategic position by availing themselves 
of the operation of the Law of Supply and Demand. 

The Doctrine of Supply and Demand, as apphed to 
labour, may be thus stated : Labour is a mere commodity, 
and the workers are in the position of men selling this com- 
modity in the market ; they are entitled only to what 
they can get by bargaining. The employers, seeking to 
buy labour as cheaply as possible, find it to their interest 
that there should be an unlimited supply of labour in the 
market. The workmen, on the other hand, find it to their 
interest that the supply of labour should be limited. This 
is the reason which underlies the old Trade Union policy 
of restricting the number of members in a trade by rigid 
apprenticeship regulations and other devices. But the 
policy of restricting numbers is now justly discredited, 
and is in reality pursued by very few of the Unions. Their 
hostility to boy labour has, however, sound reasons behind 
it, and it may safely be contended that the highest welfare, 
not merely of the working classes, but of the whole com- 
munity, cannot be secured without placing severe limita- 
tions on the employment of boys. This question is, how- 
ever, dealt with in Chapters III and VII. 

Closely connected with the policy of restriction of 
numbers, if not indeed a part of it, is the systematic dis- 
couragement of overtime by the leaders of the Trade 
Union Movement. The abolition of overtime is usually 
advocated, along with the shortening of hours of labour, as 
a means of absorbing much of that surplus labour which is 
represented by the unemployed. It is rightly felt that, 
inasmuch as the unemployed constitute that part of the 
labour supply which is in excess of the demand, their 
existence is a continual menace to the success of Trade 
Unions in their Collective Bargaining with employers, and 
that any diminution in the number of the unemployed 




must, to that extent, increase the bargaining power of the 

Perhaps the most obvious conclusion to which a con- 
sideration of the Law of Supply and Demand leads the 
Trade Unionist is the wisdom of demanding a rise of 
wages when times are good. This has led to the adoption 
of shding-scale agreements under which employers and 
workmen agree to a rate of wages which varies with the 
price of the article in the production of which they are 
engaged. Shding-scale agreements have not, however, 
achieved the success which was anticipated, though they 
still prevail in the South Wales coal trade. 

A beUef in the fact that wages tend to vary with the 
price of the product of labour, together with the knowledge 
that the price of that product rises as the quantity of it 
diminishes, has, on more than one occasion, led to deUberate 
attempts on the part of Trade Unions to restrict output. 
This restriction of output may take the form of a pro- 
hibition on each worker from exceeding a certain daily 
output, or it may take the form of an occasional simul- 
taneous cessation from work with a view to reducing 
accumulated stocks— as in the case of the " Stop-Day " 
arrangements on the South Wales coal-field. 

But a keener and a deeper perception of the workmg 
of the Law of Supply and Demand has revealed the truth 
that attempts of this kind cannot, in the long run, succeed, 
and must recoil, with disastrous result, on the heads of 
the workers themselves. Wage-earners may temporarily 
stop production by refusing to work, but they cannot 
systematically and constantly hmit it. Even if they limit 
the amount of each man's output, the Law of Supply and 
Demand soon operates to defeat their purpose. A tem- 
porary rise of prices may follow, but this is in itself an 
increased stimulus to production, and so, more factories 
are built, more machinery is introduced, more men are 
set to work, and the artificially created scarcity is followed 
inevitably by another glutting of the market. 

Strategic position is not the only consideration where 
Collective Bargaining is concerned. The intrinsic strength 
and solidarity of the Trade Union itself is equally im- 



portant. Hence we find in modem times a marked ten- 
dency on the part of Trade Unions to abandon the ancient 
poUcy of exclusion. It is recognised that to refuse members 
of a trade admission to an Union because their entrance 
into the trade has not been by the orthodox channel of 
formal apprenticeship is to leave on the labour market a 
body of men who may, by their readiness to undersell, 
prove themselves formidable competitors to the Trade 
Unionists, and neutrahse the efforts of the latter to win for 
themselves a decent standard of comfort. Accordingly, we 
find such Unions as the Amalgamated Society of Engineers 
readily admitting to membership any skilled worker in the 
trade, regardless of the manner in which his skill has been 

The tendency of the members of a trade to form them- 
selves into a vast national society with branches in all 
parts, and embracing the whole body of the workers in the 
trade throughout the country, has resulted in a marked 
increase in the power of Trade Unions to obtain favourable 
terms in their bargains with employers, and this power is 
obviously augmented by federations amongst the Unions 
serving different trades. 

Probably the greatest source of internal strength in a 
Trade Union is the practice of granting out-of-work dona- 
tion to unemployed members. More attention is given to 
this than to any of the other forms of benefit, for if the 
Standard Rate is to be preserved intact it is vitally neces- 
sary to prevent out-of-work men being compelled to accept 
work on any terms which may be offered. So great is the 
importance of this donation that, when the funds of an 
Union are running low, claimants for out-of-work pay are 
often given a preference over even the sick and the super- 
annuated members. The right of a workman to benefit 
of this kind is far more potent than savings in a bank. 
Where a stand is being made against a reduction of wages 
or for a rise, the individual workman who depends on his 
own savings alone is weakened by the fact that his fellow- 
workman, who has no savings, may soon be compelled to 
accept the employer's terms as the only alternative to 
starvation. The right to out-of-work benefit gives to 



every member of the Union the same power of re- 

It may even be said that sick-pay, tool insurance, fimeral 
grants, accident benefit, and superannuation allowances 
are all indirect means of preventing the employing class 
from taking advantage of the workmen's necessities to 
lower the Standard Rate. The out-of-work and other 
provident benefits of Trade Unions thus constitute, in 
effect, a system of Mutual Insurance under which each 
member, by payment of a small subscription, is insured 
against the necessity of being compelled to sell his labour 
on unfavourable terms. . 

It has always been a fundamental part of Trade Union 
pohcy that there shall be no separation of the funds avail- 
able for strike, lock-out, and other purposes from those 
available for purely Friendly Society purposes. It is felt 
that the evils which will follow from a " lowering of the 
dyke " are so serious that the Union must be prepared, in 
case of need, to use the whole of its funds in maintaining 
the Standard Rate. The Law also recognises this ne- 
cessity in Trade Union management. Two Cliief Registrars 
of Friendly Societies have stated their opinion that it is 
not a malversation of Friendly Society funds to use them 
for strike purposes, while Lord Macnaghten, in the recent 
case of Osborne v. the Amalgamated Society of Railway 
Servants, declared that the benevolent purposes of Trade 
Unions are secondary and subordinate to the trade pur- 

The undoubted hostility of Trade Unionists to benefit 
societies conducted by employers is thus accounted for. 
The contributions made by workmen to such societies are 
usually practically compulsory, and, owing to the poverty 
of the ordinary working-class household, the difficulty of 
getting a second subscription for a Trade Union is almost 
insuperable. An employer's benefit scheme would there- 
fore seem to be incompatible with the existence of any 
effective union amongst the employees who contribute to 
it. with the result that, so far as they are concerned. Collec- 
tive Bargaining is an impossibility. Profit-sharing schemes 
are likewise condemned by Trade Unionists because of 



their tendency to establish a diversity of interest between 
small sections of workmen employed in the places where 
these schemes prevail and the great body of Trade Unionists. 
Many of the promoters of these schemes frankly urge their 
adoption on the ground that where workmen share in the 
profits of the employers industrial disputes are less likely 
to occur. To the Trade Unionist this means that such 
workmen can, with difficulty, be persuaded to press for 
an advance in their wages, even when the circumstances 
justify it, or to resist an uncalled-for reduction. Further, it 
may be doubted whether the gain to the profit-sharing 
employee is a real one. The share of the profits which 
falls to the workman rarely amounts to more than an 
addition of 5 per cent to his wages, whereas the difference 
between wages in districts where Unionism is strong and 
districts where it is weak is often as much as 20 per cent. 

It is not necessary to affect a disbeUef in the benevolence 
and sympathy of employers towards those whom they 
employ. Really benevolent and sympathetic employers 
do, of course, exist ; but it is submitted that the benevo- 
lence which takes the form of employers' benefit societies 
and profit-sharing schemes is a short-sighted and mis- 
placed benevolence, and the employer who is sincerely 
desirous of raising the condition of the wage-earners will 
be well advised to pursue methods less dangerous to the 
welfare of the working class as a whole. 

The natural desire of Trade Unionists to make their 
Union as strong as possible leads them to seek, by various 
means, to bring within the ranks of the Union the whole 
body of workmen in the trade. In the case of the larger 
and more powerful Unions, such as the Coal Miners' Unions 
and others, these efforts sometimes amount to attempts to 
enforce a compulsory Trade Unionism. The compulsion 
usually takes the form of a refusal by Unionists to work 
with non-Unionists, resulting in the discharge of the latter 
by their employers. To many thinkers the idea of com- 
pulsory Trade Unionism is utterly repugnant as an un- 
warrantable interference with individual hberty. The 
writer frankly admits that if the question is to be settled 



by the application of the Doctrine of Individual Liberty, 
as popularly understood, compulsory Trade Unionism is 
condemned ; but there is a principle even more funda- 
mental than that of the preservation of individual liberty — 
the necessity of seeking the highest good of the nation as a 
whole, and if the question of compulsory Trade Unionism 
is subjected to the test of the latter principle it is found 
to stand the test. In every civihsed nation poUtical 
progress is marked by a series of restrictions imposed on 
individual Hberty for the benefit of the nation as a whole. 
Each individual in the nation is called upon to surrender 
a portion of his personal liberty, but, as a result of such 
surrender, finds himself in the enjoyment of wider pos- 
sibilities of action or of other material benefits, which more 
than compensate him for the loss sustained. In any pro- 
posal to take away from an individual some part of the 
liberty which he has previously enjoyed the test of right- 
fulness must be : Are the advantages which will accrue 
to the community as a whole, and to the individual, as 
an individual, substantially greater than the advantages 
which he is asked to forgo ? 

No one in these days will deny the desirability, from a 
national point of view, of a high Standard of Life and com- 
fort for the great bulk of the citizens of this nation. It is 
clear that in an age when such a standard can only be won 
and maintained by successful bargaining in a competitive 
market, the great mass of our fellow-citizens can only 
achieve a healthy and comfortable livelihood through the 
instrumentality of Collective Bargaining. The success of 
Collective Bargaining is therefore a matter of supreme 
importance, not merely to the Trade Unionist, but also to 
the non-Unionist, and to the nation as a whole. Without 
Collective Bargaining the average wage of the adult manual 
worker (the non-Unionist as well as the Unionist), which 
now stands at 24s. per week, might be forced down to 
23s., to 22s., to £1, and even below that. On the other 
hand, as Collective Bargaining becomes more effective this 
average will be raised to 26s., to 30s. — it may even be to 
40S. In this improvement the non-Unionist will participate 
no less than the Unionist. The question of the rightfulness 



of compulsory Trade Unionism is therefore, fundamentally, 
a very simple one — Shall the right of the non-Unionist to 
do as he likes — to bring down his own wages and the wages 
of hundreds of his fellows to the bare subsistence level, out- 
weigh the advantage to the community as a whole which 
will follow from a progressive movement of the workers' 
Standard of Life ? 

It is a fact well worthy of notice that the right of work- 
men to procure the dismissal of a fellow-workman by 
refusing to work with him has long been recognised in 
law. Chief Justice Cockbum said in 1861, " Every work- 
man so long as he is not bound by any contract is entitled, 
when in the service of an employer, to the free and un- 
fettered exercise of his own discretion whether he will 
remain in that service in conjunction with any other 
workmen with whom he may not choose to serve. ... If 
several workmen consider others obnoxious personally or 
on account of character or conduct they have a perfect 
right to the exercise of their discretion, and to put the 
alternative to the employer of either retaining their services, 
by discharging the obnoxious persons, or of retaining the 
latter and thus losing the others' services."* 

In the celebrated Mogul case it was settled that an 
agreement among merchants to procure the exclusion of 
a rival from the market, by persuading traders not to deal 
with him, was perfectly legal as being nothing more 
than an ordinary act of trade competition, and Lord 
Bramwell pointed out that this decision was equally 
apphcable to cases of competition in labour. 

It will, of course, be understood that in this discussion 
of compulsory Trade Unionism peaceful compulsion only 
is defended. Neither the Enghsh Law nor pohtical nor 
industrial necessities can be held to justify intimidation 
and acts of violence. 

Public opinion will rightly condemn the man who avails 
himself of his strict legal rights to commit a mean and 
ungenerous act, but when the principle of Collective Bar- 
gaining is at stake, and with it the decent Standard of Life 

* See Walsby v. Anley, 30 L.J.M.C., 121. 



of the great majority of Englishmen and Englishwomen, 
Trade Unionists may justifiably exercise their undoubted 
legal rights in order to prevent their position being weak- 
ened and undermined by disloyal members of their class. 
Trade Unionism must be regarded as a state within a 
state, and just as in the State Pohtical every adult man is 
compelled to assume the burden and responsibility of 
citizenship, so in the State Industrial every adult worker 
may rightly be subjected to influences which irresistibly 
urge him to associate himself with the organised body of 
his fellow- workers. 


THE difficulties attendant upon Collective Bargaining, 
and the deadlocks which constantly occiu: through 
the breakdown of negotiations between parties equally 
strong and equally determined not to give way on some 
point which, to the outsider, seems unimportant, have 
caused thoughtful men to look with increasing favour upon 
Arbitration as a means of settling industrial disputes. 
The business man, mindful of the advantages which a 
resort to Arbitration in commercial disputes has over the 
expensive and tedious process of a lawsuit, sees, or thinks 
he sees, in Arbitration a sure means of avoiding industrial 
disturbances. But these advocates of Arbitration often 
fail to see that there is a wide difference between a com- 
mercial arbitration and an arbitration between employers 
and workmen. Between commercial men arbitration is 
largely resorted to in cases where it is desired to arrive at a 
friendly understanding as to the interpretation of some 
ambiguous term in an agreement already concluded, or to 
make good some omission in such an agreement. But 
where the terms of a new agreement are being settled, 
no business man would consent to submit the matter to 
an arbitrator. 
Organisers of industry, and, to a less extent. Trade 


Union leaders, show the same disinclination to allow 
outside interference where the terms of a new agreement 
are being considered. Moreover, arbitrators themselves 
in such cases recognise the almost impossibility of the 
task they are called upon to perform, owing to the fact that 
there is usually no basis common to both parties on which 
they can make their award. The employers may say that 
wages should vary with prices ; the workmen may refuse 
to acknowledge this, and may say that a living wage must 
be the first charge on industry ; while to the arbitrator no 
accepted principle either of Law or of Pohtical Economy 
is available for his guidance. 

It is, however, submitted that even in such cases the 
arbitrator may have a real and a useful function. Where 
the magnitude of the dispute is such as to make it worth 
the while of some eminent pubHc man to intervene as 
arbitrator, he may, without assuming the responsibility 
of laying down the terms of a bargain which both parties 
will be called upon to accept, prepare the way for a mutual 
agreement between the parties. His high position and the 
esteem in which he is held render it possible for both 
parties to the dispute to meet in his presence on equal 
terms without any sacrifice either of dignity or of inde- 
pendence. Both employers and workmen are encouraged 
to put their case frankly before him. Asperities are 
smoothed away and bitterness of feeUng is sweetened by 

his influence. 

The arguments of each party, after being stated to him, 
are by him again set forth in their most favourable light 
and in such a manner as to appeal to the mild reasonable- 
ness of the other party. Finally, having brought both 
disputants to the point at which an agreement honourable 
and profitable to both of them is clearly in sight, he urges 
upon them and secures from them its conunon acceptance. 
Such a process is not so much one of Arbitration as one 
of Conciliation, and is, in effect, nothing more than a 
facilitation of the process of Collective Bargaining. 

Experience seems to prove that Arbitration, as a means 
of interpreting and applying the terms of an already 
accepted bargain, is attended by practical difficulties 




which largely destroy its usefulness. The disputes wliich 
arise in such cases are, as a general rule, so small in their 
scope and of so little pecuniary importance as to make the 
appeal to an outside arbitrator of eminence and skill 
impracticable, while the matters to be considered are 
often so intricate that the intervention of an unskilled 
arbitrator would be worse than useless. Where the 
wealth of a Trade Union allows it, disputes of this kind 
can be much more satisfactorily settled by negotiations 
carried on between two experts in the trade, one represent- 
ing the employers and one the men. The practice in the 
Lancashire Cotton Trade may be referred to as an example 
of this kind of negotiation. 

The calculations necessary to determine the piece-work 
wages of the weavers, spinners, and other operatives, are so 
comphcated as to be beyond both the arithmetical skill 
and the patience of the ordinary employer or wage-earner. 
Employers and workpeople have, therefore, long recog- 
nised the necessity of maintaining salaried professional 
men who are experts in these matters, and who devote 
their whole time to the service, respectively, of the em- 
ployers* association and the Trade Union. Thus, while 
the agreements fixing piece-work rates, hours of labour, 
etc., are arrived at by bargaining between the employers' 
associations and the Trade Unions, the interpretation 
and appUcation of the lists is carried out by official experts, 
who are constantly meeting as a matter of ordinary 
business for the purpose of making the necessary calcula- 
tions and negotiations. 

Compulsory Arbitration lies outside the domain of 
Arbitration proper, being in effect an indirect way of 
fixing by Legal Enactment the wages and the conditions 
under which industry shall be carried on. It presupposes 
the recognition by the conununity of the necessity of a 
fixed minimum Standard of Life, the maintenance of 
which shall be the first charge on industry — in other words. 
Compulsory Arbitration is only possible where both parties 
to the arbitration are agreed on the principle of a Minimum 
Wage, and come together before the arbitrator to decide 
what that Minimum shaU be. 


The practical difficulties in the way of arriving at such 
a decision are not in reality so great as is usually supposed. 
If it be granted that the well-being of the nation demands 
that each worker shall be sufficiently fed, and clothed, and 
housed, and enjoy a sufficient leisure, the task of deciding 
what constitutes such a sufficiency is one which may be 
left in each district and industry to physiological experts. 
Such a decision having been made, and the facts being 
before a Board of Arbitration composed of representatives 
of the employers and the workmen in equal numbers, 
with a neutral chairman, it is for that board to translate 
the material requirements of the workers into terms of 
pounds, shillings, and pence, thereby arriving at a Minimum 
Wage for the trade in the district. 

The opponents of the Doctrine of a Minimum Wage 
commonly urge as an objection against it that any serious 
attempt to force on employers the payment of a statutory 
rate of wages would result in the complete dislocation of 
industry. The same argument was made use of in the 
early decades of the nineteenth century, when, by the 
passing of the first Factory and Mines Acts, a minimum 
standard of sanitation, safety, and leisure for the workers 
was enforced. But the experience of nearly a century has 
shown that the employer's methods of " conducting his 
own business " may be subjected to interferences of the 
widest scope and the minutest detail without threatening 
its successful continuance. 

It is clear that when Government prohibits an em- 
ployer from paying any employee in his service less than 
a certain minimum wage, the interference in the internal 
organisation of the factory, workshop, or mine which is 
thereby involved is neghgible as compared with the 
regulation and supervision which are necessary to the 
enforcement of the requirements of the Factories and 
Workshops Act, the Mines Regulation Acts, and other 
similar Acts. 

Nor would the enforcement of a minimum wage necessi- 
tate the resort to draconic measures of compulsion against 
the employer. Where an owner of a factory neglected to 
comply with the recommendation of the Board of Arbitra- 


tion for his district, there would be no seizure of his 
premises by the police or the military, nor would a Govern- 
ment official be put in charge for the purpose of paying 
to the workmen the statutory wage. There would be 
nothing more exciting and nothing more oppressive than 
a visit from the factory inspector, followed by proceedings 
in the local police court and the imposition of a fine. 
Such a course of procedure is sufficient to ensure the 
observance of the present requirements of the Factory 
Acts. There is no reason to suppose that it would be less 
effective in securing obedience to an additional requirement. 
Further, there can be little doubt that Compulsory 
Arbitration conducted on the basis of an accepted minimum 
Standard of Life, and with a view to the fixing of a Minimum 
Wage, would be an effectual remedy for strikes and lock- 
outs. A strike or a lock-out has rarely, if ever, been 
indulged in as a protest against a new Factory Act, or a 
new Truck Act, or against an Act fixing the hours of 
labour. Disagreements as to wages are by far the most 
fruitful source of industrial disturbance. Let a minimum 
standard of comfort be assured to the workman and, at 
the least, it may reasonably be hoped that strikes, for the 
purpose of resisting reductions of wages, will become a 
thing of the past ; and it may be that the Trade Unions' 
power of Collective Bargaining will be so strengthened that 
all reasonable demands for advances in wages will be 
granted without resort to the hazards of industrial warfare. 




A COMPLETE account of Trade Unionism will correct 
-^^ certain misconceptions regarding the aims of Trade 
Unionists, and will attempt to answer certain criticisms 
which have been levelled at the movement. Many of the 
opponents of Trade Unions still cherish the notion that 
Trade Unionists are opposed to the use of machinery. 



Though such a charge might have been true sixty years 
ago. Trade Unions have long ago abandoned their hostihty 
to machinery. The report of the Royal Commission on 
Labour in 1896 makes no mention whatever of any such 
hostility, and the rules and regulations of hundreds of 
Trade Unions have been analysed by Mr. and Mrs. Webb 
without the appearance of any evidence of antagonism 
to invention or improvement of any kind. 

Most of the modem disputes and strikes which are 
caused by the introduction of machinery are disputes as 
to the conditions under which the introduction shall take 
place. The introduction of new machinery generally 
means a quickening of production. If the workers are paid 
by the piece the new machinery enables them to turn out 
an increased quantity of work in a given ^ime, and the 
employers, without seeking to lower the actual amount of 
wages paid, may propose a reduction of piece-rates. The 
workers, on the other hand, will perhaps contend that 
though they can, by the aid of the new machinery, increase 
their real output, the intensity of the strain which their 
work involves is also increased. Similarly, if the workers 
are paid for time, the increased strain seems to them a 
reason for a rise of wages. It is on such points as these 
that the employers and the Trade Unions join issue, the 
advisabiUty of using the new machinery scarcely ever 
being questioned. . 

It must now be conceded that in the interests of the 
operatives the introduction of new machinery, the re- 
organisation of factories, and changes in processes all 
require to be carefully watched by Trade Unions, and that 
to deny to Trade Unions the right to be consulted in such 
matters is to deny the principle of Collective Bargaining. 
These matters involve, of necessity, changes in the con- 
ditions under which the men will work, and these changes 
are obviously matters for negotiation just as much as 
any other changes which are likely to affect the rate at 
wliich the workmen shall be remunerated. 

Unfortunately, both employers and Trade Unions often 
seem indisposed to face in a reasonable spirit the questions 
thus raised. 


Cases are not uncommon where employers demand a 
substantial reduction of piece-rates, or even a change from 
piece-rates to time-rates, not because profits are threatened, 
but because the maintenance of the old rate under the new 
conditions will give to the workman a wage which, to the 
master, seems absurdly high for a workman. On the other 
hand, for the employee to claim the old rates for work 
done under improved conditions or with improved machin- 
ery is, in effect, to claim an increase of the Standard Rate. 
Such a claim may, of course, be justified, but it should 
not be disguised in the form of a demand for the mere 
maintenance of the old rate. In disputes of this class 
workmen have occasionally gone so far as to assert that 
wages should be the price of goods, and that where any 
improvement is effected in machinery or manufacturing 
processes, the whole benefit of that improvement should 
be absorbed in wages. Without either defending or 
attacking such a claim, it may be said that this assumption 
forms no part of the Trade Union theory as at present 
accepted, and any attempts of Trade Unionists to secure 
its acceptance by the community at large is not at pre- 
sent hkely to be successful. 

The Compositors, on the introduction of the Linotype 
machine, set an example which might well be followed by 
all Trade Unions in the settlement of such disputes. They 
disclaimed any desire to prevent the introduction of the 
new machines, but sought to secure employment for their 
members on those machines on such terms as would 
protect the Standard Rates, claiming for the workmen a 
share, but not the whole, of the advantages which resulted 
from the invention. 

The Cotton Spinners and Weavers for the last fifty 
years have acted on the same principle. Where any new 
machinery is adopted, or any change in the internal 
economy of the factory is made, the new conditions are 
arranged by agreement between the official experts repre- 
senting the Trade Unions and the masters' associations 
respectively. Both sides admit as the basis of all negotia- 
tions the necessity for maintaining the Standard Wage. 
The Trade Unions meet the employers so far as to agree 



to an automatic decrease of piece-rates with every rise in 
the productivity of the machinery, while the employers 
concede to the operatives the full benefit of any new 
dexterity which they may gain in the new practices. 

The Boiler-makers and Iron-shipbuilders in their 
agreements with the employers consent to revision of 
rates on accoimt of labour-saving apphances, improved 
arrangements in the yards, and in respect of types of 
vessels on which the work is easier. Such revisions are 
made from time to time, as occasion arises, by a com- 
mittee of employers and employees constituted for the 

The following would therefore seem to be the wisest 
policy for Trade Unions to pursue in relation to industrial 
improvements : — 

In all negotiations concerning the introduction of 
improved machinery or the establishment of improved 
conditions of production, the Trade Union should bargain 
on the assumption that the improvement cannot be 
allowed to put the operative in any worse position than 
he was in before, either as regards rates of pay, hours of 
labour, physical or mental exertion, or discomfort or 
disagreeableness of work. Further, the workman shall, 
by an increase in the Standard Rate, share some of the 
advantages which follow on the improvement. 

Such a policy may be pursued consistently with benefit 
not merely to the operatives in the trades concerned 
but to the community as a whole, for it becomes a matter 
of interest to Trade Unions to insist on the introduction 
of improved machinery and improvements in manufactur- 
ing processes. 

Thus in Lancashire the Trade Unions feel they have a 
grievance when one employer lags behind the rest. A 
backward or sluggish employer may be tolerated by the 
neighbouring employers as one rival the less, but to the 
operatives he is a danger, and Trade Unions by refusing 
to make allowances for obsolete and imperfect machinery 
and processes, or even by demanding higher piece-rates 
where they exist, may do much to stimulate industrial 



The assumption that the wages and other conditions of 
employment hitherto enjoyed by any section of workmen 
ought not to undergo any change for the worse, gave rise 
in the early days of Trade Unions to the Doctrine of 
Vested Interest. The idea of a vested interest is common 
to all the professions, and probably originates in a per- 
ception of the social inexpediency of allowing the reason- 
able expectations of worthy and industrious members of 
society to be disappointed. Some of the early Trade 
Unions justified their existence by an appeal to this 
doctrine, comparing the members of their trade >yith the 
members of the learned professions. The doctrine was 
thus responsible for attempts to Hmit the nuniber of 
workers in many of the trades with a view to minimising 
the evils of competition. It was responsible for the 
practice of lengthened apprenticeships, and it inspired the 
long struggle against the introduction of machinery. 

It must, however, be admitted that to act on the doctrine 
is often to bring upon society even worse evils than 
disappointment of expectation. The Industrial Revolu- 
tion destroyed the vested interest of craftsmen in their 
trade, for with the rapid succession of new inventions 
and processes the vested right in a trade could only have 
been maintained by prohibiting machinery and other 
innovations. New classes of industrial workers were 
growing up who had no vested interest in any trade and 
were therefore hostile to the idea, while the interests and 
influence of the consumer were in direct opposition to the 
principle. Considered from the point of view of the 
common good the doctrine is indefensible as being incon- 
sistent with the most rapid adaptation of society to new 
needs in an age of progress, and the majority of Trade 
Unionists now acknowledge that the principle has no 
longer any validity. 

The claim to a vested interest in a trade is still, however, 
sometimes asserted in connection with what are known as 
Demarcation Disputes, which arise in consequence of the 
overlapping of trades. The main cause of overlapping is 
probably the invention of a new process which, being akin 
to two or more trades but outside them both, results in 



the members of each of the affected trades claiming the 
sole right to perform the new process to the exclusion of 
the others. The introduction by a single firm of employers 
into their own establishment of a new system of division 
of labour, or the migration of employers or employees 
from one town to another where the lines of demarcation 
between the trades are different, may lead to similar 
results, while the open aggression of a strongly organised 
trade upon one less strong is not altogether unknown. 

The Iron-shipbuilding trade has probably seen more 
disputes of this kind than any other trade in the country. 
Modem shipbuilding differs so greatly from shipbuilding 
as practised half a century ago, that the rules and customs 
evolved in the early days of Trade Unionism are now 
often utterly inapplicable to the existing conditions. 
The building and fitting up of a modem ship involve an 
almost infinite variety of operations, e.g., shipbuilding, 
engineering, plumbing, carpentry, cabinet-making, up- 
holstering, painting, blacksmith's work, etc. 

A notable dispute took place in 1890 between the Joiners 
and Shipwrights on the Tyne. The matter was submitted 
to the arbitration of Mr. T. Burt, who dealt in his award 
with 168 different items of work, 96 of which he assigned 
to the Joiners and 72 to the Shipwrights. This award was 
disputed by the Joiners, and it was only after a fourteen 
weeks' strike that they agreed to accept the decision of a 
committee composed of representatives from various trade 
societies on the Tyne who affirmed the Burt award. 
During the years between 1890 and 1893 there was a period 
of thirty-five weeks during which one or other of the four 
most important sections of the Tyne trade were out of work 
on account of disputes arising out of the demarcation of 
the respective trades. 

A serious feature of such disputes is not only that they 
injure the employers and the industry generally, but that 
they weaken Trade Unionism and render " black-legging " 
almost inevitable. The employers say that the obvious 
way out of the difi&culty is to allow them perfect freedom 
in the selection of the men most suited for the work, but 
to the Trade Unions this claim is clearly inadmissible, 




for Collective Bargaining is impossible unless the member- 
ship of each Trade Union is precisely defined so that each 
workman knows the collective agreement by which he is 
bound. Further, under such an arrangement the Standard 
Rate could not long be maintained, inasmuch as the em- 
ployers would inevitably be tempted to hand over, little 
by little, the work of the highly-paid men of one trade 
to the men of another trade who would do it more cheaply. 

Any solution which is to be permanent must protect the 
employer from the annoyance of unnecessary stoppages 
caused by overlapping, and, at the same time, guarantee 
the Trade Unions against any encroachment on the 
Standard Rate and against any undermining of their organi- 
sation. It is submitted that some such plan as the follow- 
ing satisfies all these conditions. The Trade Unions in 
those trades which are allied to each other by the nature 
of the operations they perform, or by reason of the simi- 
larity or identity of the materials on which they work, 
should form themselves into federations for the purpose 
of deahng with matters of demarcation. Within the circle 
enclosing the members of these alhed trades the employers 
should be free to employ in any process, in respect of which 
a dispute exists, whatever workmen they think most 
suited to their purpose, the federated unions contenting 
themselves with securing by Collective Bargaining with 
the employers a Standard Rate of payment for the work. 
Thus within such a federation each Trade Union would, 
under ordinary circumstances, bargain independently of 
the others for a Standard Rate in its own trade, but 
when a dispute arose as to the trade to which a certain 
class of work should be assigned, the Collective Bargaining 
for the rate of pay for that class of work would pass into 
the hands of the federation, which would enter into negotia- 
tions with perhaps a corresponding federation of employers. 
The rate of pay for the work having been fixed, and the 
employers having chosen their men for the work, the 
federation would, if necessary, decide which one of the 
allied unions might most suitably admit to membership 
the new class of workers. 

The charge against Trade Unions that they deliberately 



restrict output can, except in a few isolated instances, be no 
longer sustained. This subject is, however, fully considered 
in Chapter IV. In Chapter II it has been shown that the 
majority of organised workmen favour piece-work rather 
than time-work, the preference, however, being based 
on the consideration that in the trades concerned, piece- 
work rates are the more effective means of protecting 
the Standard Wage. In the Engineering and certain other 
trades piece-work rates are less satisfactory as a means of 
enforcing the Common Rule than time-rates, and we 
accordingly find such trades opposed to piece-work. 

In the old days, workmen's organisations were fre- 
quently countenanced by the tradesmen of the towns 
because of their insistence upon what they deemed to be 
the advisabiUty of " keeping work in the town." Such 
a poHcy, when seen from the wide point of view of the 
political economist, cannot, of course, be defended. It 
may, however, be useful to examine the motives which 
have prompted Trade Union action in these matters. 
Trade Unions were originally purely local clubs, each 
organisation being distinct from other organisations in 
the same trade. A spirit of jealousy and exclusiveness 
pervaded them all, each Union trying to keep the trade of 
its own town within the town, and even resenting the 
entrance into the town of workmen of their own trade 
coming from other towns. The struggles between these 
local Unions ceased as the Unions themselves were welded 
into great national organisations embracing the whole of 
the trade with which they were connected. But the 
policy of " keeping trade within the town " was in many 
cases still clung to, partly, no doubt, as a tradition^ but 
to a large extent on another ground, namely, a desire to 
prevent employers in the town evading Trade Union 
regulations by getting work done in districts where either 
there was no trade organisation, or a low Standard Wage 
obtained. Thus some branches of the Friendly Society of 
Operative Stone-Masons still prohibit their members 
from working on stone which has been imported into their 
town in a worked state from an outside district. Such 



imported stone is usually worked up in the quarry districts 
where the Stone-Masons are poorly organised, and where 
the wages and conditions are bad. It is therefore clear that 
if the organised Stone-Masons took no steps to prevent 
employers resorting to evasions of this kind, their organi- 
sation would soon become utterly futile. Moreover, in 
large towns the various jobs in the building trade may 
be so dovetailed into each other as to ensure regularity 
of work, while the quarry owners who only receive 
spasmodic orders for the worked stone, often rely largely 
on the services of Stone-Masons who are "on tramp." 
To encourage work of this kind in preference to regular 
town work cannot fail to increase the number of these 
nomadic workmen, and, in the long run, to lower seriously 
the character of the members of the trade. 

The Trade Union pohcy of " keeping work in the town *' 
is not, where still followed, mere local " Protectionism," 
but is based on the desire to protect and advance the 
interests of the trade as a whole throughout the country. 
As showing the wider outlook now taken by the more 
enlightened Trade Unions, we may mention the variation 
of the pohcy followed by the London Society of Com- 
positors and the Typographical Association. These 
societies, at election times, now urge candidates to place 
their printing orders not necessarily within the con- 
stituency, but in those districts where the work is done 
under Trade Union conditions. Many other similar 
instances could be furnished of a Trade Union taking 
steps which affect unfavourably the workers in a certain 
area in order to secure benefits for the trade as a whole. 



nPHE references which have been made to such questions 

-■■ as the Vested Interest of the skilled workman in his 

trade and the now almost obsolete Trade Union pohcy 

of Restricting the Numbers of workmen in a trade, render 




it advisable to notice briefly the apprenticeship system. 
Modem apprenticeship, so far as it exists, appears in the 
two following forms : i. The formal indentured apprentice- 
ship, designed to secure an efficient technical training, and 
to give to the trained craftsman the protection of a mono- 
poly. 2. The custom of " patrimony," under which 
journeymen in certain trades are allowed to bring their 
own sons into the trade. This is really no more than a 
privileged exemption from the operation of the strict 
apprenticeship system. 

The best example of apprenticeship, in the strict sense, 
is seen in the United Society of Boilermakers and Ship- 
builders. This society has entered into a formal treaty 
with most of the Master Shipbuilders, under which the 
employer binds himself to give instruction to the appren- 
tice, who must enter into formal indentures before he is 
eighteen, and serve five years at a low wage. By this 
treaty, the ratio of apprentices to journeymen must be as 
two is to seven. 

The custom of " patrimony " still exists in many of the 
branches of the Sheffield Cutlery Trade where it is, in 
many cases, the only avenue to employment. Among the 
Stone-Masons the " patrimony " and the apprenticeship 
systems exist side by side, but the trade seems to be 
largely recruited by the former means. As the Boiler- 
makers, the Sheffield Cutlers, and the Stone-Masons com- 
prise the majority of trades in which apprenticeship 
regulations are systematically enforced, it is improbable 
that the total number of operatives in the strictly ** closed 
trades " exceeds 90,000. 

There are several trades which are theoretically closed 
but in practice open, the regulations regarding entrance 
not being capable of enforcement. The Compositors in 
many of the large towns insist on the boys being bound 
for seven years, and the number of apprentices allowed 
in each firm is strictly limited. But these regulations 
are quite insufficient to prevent the admission of " illegal 
men " into the trade. In every village and small town there 
are printers in a small way who employ bo}^. The boys 
pick up the rudiments of the trade in these places and then 



proceed to larger establishments as " improvers." Finally, 
the best of them obtain work in the large centres of popula- 
tion on the same terms as men who have been formally 
apprenticed, and the Unions, in order to control them, 
are bound to admit them to membership, lest the main- 
tenance of the Standard Rate should become impossible. 

A similar state of affairs prevails amongst the Engineers. 
The modem engineering shop contains a large number of 
machines of gradually increasing complexity. The simplest 
of these machines can be both safely and usefully worked 
by boys and unskilled men, who can as safely and as 
usefully pass on successively to other machines of increasing 
complexity until they finally emerge as skilled and com- 
petent men. It is thus impossible to draw a hue between 
Labourers and Engineers, and the apprenticeship regula- 
tions of the Amalgamated Society are more or less futile, 
the association being obliged, for the sake of its own safety, 
to admit as a member anyone who is capable of obtaining 
employment at the Standard Rate. In the same category 
as the Engineers and Compositors fall the organised 
workmen of most of the Metal, Building, and Printing 

By far the greater number of the skilled trades of this 
country are what may be called " open trades," that is, 
trades in which no attempt is made to restrict admission. 
The most powerful organisations of this class are the 
Coal-miners and the Cotton Workers' associations. 

It would therefore seem that the apprenticeship system 
plays a very unimportant part in modem industry. 
Whether we judge it as an educational instmment, or as 
a means of restricting the entrance to the trades, the S5rstem 
has failed. 

Judged as an educational system it has the following 
defects: i. It no longer pays the large employers to 
undertake responsibility for the training of boys, even if 
premiums are paid, nor does it seem to the boy a profitable 
transaction to engage himself at a low wage as an appren- 
tice when more highly paid situations are to be had at 
work not requiring instmction. 2. There is no security 
that the boy will really be taught a trade, nor that when 



taught he will be protected from the competition of others 
who have not served an apprenticeship. 3. From the 
point of view of the community the apprenticeship system 
has this disadvantage, that it leaves outside its scope a 
large proportion of boys who join the ranks of the un- 
skiBed labourer. 

But the abandonment of the apprenticeship system, 
and the desire on the part of those who employ boys at 
comparatively high wages to get the utmost value from 
their labour, has resulted in such an extension of the num- 
ber of divisions of labour, that in many trades production 
has now been resolved into a large number of mechanical 
and routine processes, each capable of being performed 
by boy labour. The boys thus employed are only kept 
on for a few years, and are then dismissed to make way 
for other and younger boys. The resulting evil is twofold. 
In many trades adult labour is being entirely displaced, 
while the boys are allowed to grow up into men without 
receiving any skill or training by means of which they can 
eam a livelihood. As has been already pointed out in 
Chapter III, such trades are parasitic on the community, 
and there is little or no justification for their existence. 
Sir Henry James, arbitrating in 1892 in a dispute in the 
Shoe trade, admitted the evil of excessive boy labour, and, 
subject to many exceptions, made an award by which a 
limit of one boy to three journeymen was imposed. As a 
permanent solution of the problem the establishment of 
any universal Hmit of this kind, either by Collective 
Bargaining or by Legal Enactment, is insufficient, for it 
does not relieve the community of its responsibiUty for the 
welfare of the boys who are excluded from employment by 
the setting up of the limit. 

The tme remedy lies in a raising of the school age and 
an extension of technical education, together with the 
adoption in all trades of the system of " Progression " 
akeady described as prevalent in the Printing and Engineer- 
ing trades. 

The immediate raising of the age for half-time exemption 
to fourteen and the gradual raising of the age for full-time 
exemption to eighteen will, to begin with, cut off the supply 


of boy labour at its source, at the same time making 
possible an adequate provision for the future of the boys. 
By an amendment of the Factory and Workshops Acts em- 
ployers should be forbidden to engage boys under the age 
of sixteen or eighteen (or whatever the age may be) for 
more than, say, twenty-four hours per week, and should 
be made responsible for securing their attendance at a 
technical school for another twenty-four hours per week. 
Where the exigencies of the industry demanded it, as in 
the case of Agriculture, the attendance at school and at 
work might be allowed to extend continuously over 
periods of weeks or months alternating with each other. 
The technical schools should not attempt to train the boys 
in specific trades. The education given should take the 
form of general hand and eye training, drawing, workshop 
mathematics, etc., with a certain amount of such physical 
training as is afforded by games and sports. At the 
conclusion of the school period, or, it may be, even during 
the period of his half-time employment, the boy will begin 
to work at his chosen trade, performing simple duties 
under the eye of skilled workmen, or perhaps of instructors 
specially appointed for the duty. The general skill of 
hand and eye acquired during his years of instruction at the 
technical school would enable him to acquire rapidly the 
special skill necessary for the satisfactory performance 
of the duties allotted to him, so that he >yould pass rapidly 
from the simpler kinds of work to the more complex, 
becoming a skilled craftsman by the time he reached the 
age of twenty-one. 

Apart from any connection with an extensive system of 
technical education, this system of regulated progression 
within a trade has obvious advantages over the old system 
of apprenticeship. It is not exclusive and does not favour 
monopoly, for it supphes abundant opportunity of picking 
up a trade to the sharp lad and the unskilled labourer who 
is ambitious. While it leaves the employer free to select 
for promotion the best men, it is quite consistent with the 
Trade Union objects of continuity of liveUhood and the 
maintenance of a decent Standard of Life. 

Not only is the system growing, as has been shown. 



in the manufacturing industries, but it is largely followed 
on the railways, in many of the great commercial under- 
takings managed by corporations or syndicates, and in 
those branches of the Civil Service, such as the Post Office, 
where the aristocratic tradition in favour of promotion by 
seniority does not prevail. There can be little doubt that 
such a system, appHed throughout the whole of our 
industries, and linked up with an improved system of 
elementary and technical education, would bring about a 
marked increase in industrial efficiency, and would re-act 
favourably on the character and intelligence of the whole 


THE directions in which Trade Union activities tend 
to develop at the present day make it possible, 
without venturing very far into the region of prophecy, 
to predict with some certainty the nature of the services 
which these organisations will, in the future, render to 


The internal administration of industry involves three 
classes of decisions. It is first of all necessary to decide 
what commodities and services are to be supplied to the 
community ; in other words, the consumer's needs must be 
ascertained. Then the manner of producing the required 
commodities, or of performing the required services, must 
be considered. This involves the settling of such questions 
as materials, the choice of processes, and the selection of 
the human agents necessary for the work. Finally, it is 
necessary to arrange the conditions under which the hirnian 
agents shall be employed. The decisions of this class 
cover questions of wages, duration and intensity of toil, 
sanitation, ventilation, safety, and similar matters. 

The only persons capable of arriving at just conclusions 
regarding the consumer's desires for commodities and 
services are the middle-men, who may, of course, be either 



private capitalists or state officials. Such decisions are 
not for the Trade Unions to make. The Trade Unionist 
possesses no special technical knowledge of these matters 
and IS under the further disquahfication that he would' 
t)y reason of his position, be naturally biased against 
changes. ° 

The decisions of the second class are most properly made 
by the (^rectors of industry, the Trade Unions being again 
disquahfied by reason of their lack of the necessary techni- 
cal knowledge and their natural bias in favour of what- 
ever exists. Any bias of this kind which the captain of 
mdustry may have is very effectually corrected by his 
desire to satisfy the consumer. 

To decide on matters coming under the third head is 
the special function of Trade Unions. The first-hand 
knowledge which they possess of working-class hfe its 
needs, its difficulties, and its aspirations, quahfies them 
for this duty. The function of Trade Unions is therefore 
seen to be a permanent one, and whether capitahsm 
develops m the direction of a system of trusts, or is super- 
seded by CoUectivism, the Trade Union will be one of the 
pnncipal elements in our industrial constitution. Even 
under a system of CoUectivism with a statutory national 
mmimum, the directors of industry will, as the agents of 
the consumers, be bound to strive constantly to cheapen 
production, and as they cannot be in perfect touch with 
the conditions of hfe and the needs of the producers each 
grade of workers will need to be organised in order to 
secure the adaptation of the National Minimum to their 
special conditions, and in order that they may, if necessary 
and in the last resort, compel pubhc attention by a strike! 
Whether existmg industrial conditions continue or a 
coUectivist system is estabhshed. Trade Unions will dis- 
charge their main function by Collective Bargaining 
vaned by more or less occasional resorts to Legal Enact- 
ment. Over the three classes of Trade Unionists, organisers 
of production, and distributing middle-men, wiU stand 
the democratic community whose decision, expressed 
through Parhament and the National Civil Service, must 
ever be final. Democracy will not interfere with the 



process of Collective Bargaining save to prevent the 
business of the community being interfered with. But 
there can be little doubt that the community will more 
and more frequently, in those cases where Collective 
Bargaining breaks down, compel the parties to arbitrate. 
As has been pointed out in Chapter V, the acceptance by 
democracy of the Doctrine of a Living Wage is, however, 
an essential condition of success in industrial arbitrations, 
and we may therefore expect to see the agitation for the 
Living Wage become an element of prime importance in 
the Trade Union poHcy. 

In the past. Trade Unions have usually been more active 
in agitating for higher wages than in demanding improved 
conditions of labour. The safety and convenience of the 
community, and, to a large extent the justification of 
Trade Unionism in the eyes of the community, require that 
these shortcomings should be corrected. An excessively 
long working day and circumstances connected with 
labour which are insanitary or dangerous are no less 
prejudicial to national efficiency and happiness than 
insufficient nutrition consequent on a low wage-rate. Nor 
is it possible to over-emphasise the improvement in personal 
habits, tastes, and character consequent on substituting 
for an ugly, dirty, and offensive environment such sur- 
roundings as prevail in places Uke Boumville and Port 

It was shown in Chapter III that the natural consequence 
of the enforcement of the Common Rule in the better- 
organised trades is ultimately to destroy the trades that 
are parasitic, though the good thus done is largely neutral- 
ised by the growth of other similar industries which spring 
up in unexpected places, and flourish for a short time at 
the expense of the nation's manhood and womanhood. 
Trade Unions may thus serve themselves and the nation 
by the conscious pursuit of a pohcy directed towards 
the elimination of all forms of sweating. While Legal 
Enactment would probably be most efficacious in rooting 
out the evil, the organising of the sweated workers is a 
remedy capable of immediate apphcation. Unfortimately, 
the workers of this class are, by reason of their poverty, 


timidity, and lack of intelligence, almost incapable of 
self-organisation. Considerations both of humanity and of 
self-interest therefore prompt the wealthier and more 
powerful Trade Unions and federations to take upon them- 
selves the task of organising, and even to some extent 
financing, the workers in the sweated trades with a view 
to the extension of the area in which the Common Rule 
prevails, and the bringing of large sections of the industrial 
army under Trade Union discipline. 

It is often urged that the enforcement of a Standard 
Rate upon the sweated industries would, even if it did not 
destroy the industries, render unprofitable the employment 
of old, infirm, and defective workers. With regard to the 
danger of destruction of the industry it may be observed 
that by preventing any class of employers from relying 
on parasitic labour, we may compel those employers to 
amend their methods. Industries carried on by parasitic 
labour are, in fact, drawing a flesh and blood bounty from 
the State, and the withdrawal of such a bounty will, as in 
the case of the withdrawal of other bounties, stimulate 
the employers in the trades concerned to greater vigour 
and skill. Moreover, it is very certain that if more is 
paid for labour, the labour is worth more, as was seen 
when slavery was abolished in America, and humane 
conditions were enforced in the Lancashire Cotton Trade. 
Undoubtedly many parasitic trades that can now just 
keep going would cease to exist, but it would seem to 
follow from the theory of International Trade that there 
would be a corresponding increase in some other trade, 
securing to the community a balance to the good on the 
whole change. 

It cannot be denied that the destruction or the reform 
of the parasitic trades would throw on to the market a 
large number of persons who are imemployable with 
profit at Standard Rates. By such unemployables we mean, 
not the capable workman who, through slackness of trade, 
is out of work, but the sick, the crippled, the criminals, 
the incorrigibly idle, the morally deficient, and persons 
incapable of steady or continuous application. The best 
regulated society must, of necessity, contain a certain 




number of such, but it is ruinous to the nation, it is ruinous 
to the working classes to leave this class on the labour 
market, because they compete with the really fit, and, by 
compelling them to accept a remuneration appropriate 
only to the unfit, drag them down to the level of the unfit. 

Any consideration for the interests of infirm and in- 
capable workers, which leaves them exposed to > the 
force of industrial competition and to the mercies of 
grasping employers, is therefore, so far as these un- 
fortunates are concerned, a mistaken form of kindness, 
while it endangers the decent Standard of Life of those 
who are more fortunate. The soundest policy for the 
organised workers to pursue is that of advocating the 
estabhshment of colonies in which this unemployable 
residue shall be engaged in producing materials for their 
own consumption, and not for sale in the open market. 
Such colonies are already in existence in Belgium and 
Holland, and though they are not self-supporting, the 
annual cost per head to the conmiunity is not very great, 
being at Merxplas less than £io. This loss would probably 
be more than counterbalanced by the diminution in 
charitable calls and the costs of administering the Criminal 

As the power of Trade Unions grows, and the force of 
public opinion which supports them increases, their 
reasonable demands will be less frequently resisted by 
employers. The struggle to maintain and to advance 
the workers* Standard of Life will therefore become less 
strenuous, and they will be able to devote a larger share 
of their energy to increasing the technical efficiency of their 
members, and in this respect may, in time, come to re- 
semble the professional associations. Indeed, if the future 
should bring forth some comprehensive scheme of technical 
education, there seems to be no reason why Trade Unions 
should not be largely entrusted with its administration. 

The Friendly Society activities of Trade Unions will 
probably decrease except where they are concerned with 
unemployment. The Old Age Pensions Act and the 
Workmen's Compensation Act now make provision for 
old age and accidents, and a Government scheme of insur- 


ance against sickness and invalidity is promised. Fluctua- 
tions in the demand for labour, caused by the vicissitudes 
of harvest and changes in the fashions, make a certain 
amoimt of unemployment a permanent feature in every 
modern state. This evil is to be dealt with by a scheme of 
Insurance financed in part by the State and the employers, 
and in part by the Trade Unions. The co-administration 
of this scheme will probably be the only Friendly Society 
work of importance left for Trade Unions to perform. 

We may expect that in the future Trade Unions will 
show an even greater activity than in the past in the 
procuring of legislation of an industrial and social character. 
The advantages of Legal Enactment over Collective 
Bargaining, as a means of securing benefits to the masses 
of the people, are so undoubted as to ensure its apphcation 
in all possible circumstances. A step taken by this means 
can rarely, if ever, be retraced, for a benefit secured to the 
workmen by statute cannot again become a subject of 
dispute. Any raising of the level of the Common Rule by 
legislation will, at the least, affect uniformly the whole of 
the trade concerned, and may even apply to the entire com- 
munity. But the use, by Trade Unions, of the method of 
Legal Enactment depends for its success on the nature of 
Trade Union organisation, on the principles on which 
federations of Trade Unions are estabhshed, and on the 
relation between local Trades Councils and National Trade 
Assemblies, and the clear differentiation of their functions. 

The United Textile Factory Workers' Association of 
Lancashire is, in respect of its organisation and strict 
limitation of its purposes, well worth study and imitation. 
It is a political association of numerous Trade Unions, 
which, being individually concerned with matters of 
Collective Bargaining and Insurance, have federated 
themselves for the sole purpose of remedying grievances 
for which Parhamentary or governmental interference is 
required. It consists of: i. A representative assembly 
known as the General Council, which is made up of dele- 
gates from the various branches of the constituent Trade 
Unions. 2. A federal executive, known as the Legislative 
Council, composed of the salaried officials of the separate 



Unions. All complaints and grievances are first laid before 
the Legislative Council which discusses possible remedies, 
and, where a remedy is practicable, makes a recommenda- 
tion to the General Council and, with the latter's sanction, 
calls in the aid of a lawyer to draft the necessary Bill. 
The association then enters upon a vigorous political 
campaign — pubUc meetings, articles in the press, inter- 
views with local members of Parliament and Parhamentary 
candidates, and lobbying, all being resorted to with a view 
to secure the passing of the Bill. 

The methods and organisation possible in the case of an 
important trade like the Lancashire Cotton Trade, which 
is locahsed within a circle of thirty miles' radius drawn 
round Manchester, cannot, however, be appUed success- 
fully to the smaller Trade Unions, or even to the large 
national associations which, hke the Society of Carpenters 
and others, are formed by the amalgamation of numerous 
small branches scattered over the length and breadth of the 
coimtry. The pohtical needs of the workers in these 
small and scattered trades will be best served by local 
federations embracing all the trades in the respective 
localities, and working under the guidance and control of 
a national federation of all the trades. The existing local 
Trades Councils and the Trade Union Congress supply the 
requisite machinery, though its efficiency is somewhat im- 
paired through the failure of its designers to perceive the 
necessity for a clear definition of the functions of the local 
and national bodies respectively, and by the failure of the 
Congress to supply the necessary skilled guidance to its 
constitutent unions and to the local councils. 

It would seem that what is now wanted is a reorganisa- 
tion of the constitution and procedure of the Trade Union 
Congress after the model of the United Textile Factory 
Workers' Association. Now that the Parliamentary 
Labour Party is an estabhshed fact, it should be recognised 
that the true function of the Trade Union Congress is the 
advocacy, not of general measures of social reform, but of 
particular measures desired by its constituent Trade Unions 
as necessary in the interests of the trade which they exist 
to protect. The Parhamentary Committee of the Congress 


should be reconstituted so as to consist entirely, or mainly, 
of the chief salaried of&cials of the Unions represented in the 
Congress. These should not be members of Pariiament, 
and should confine themselves entirely to the official 
duties arising out of their connection with the Congress 
and with their respective Unions. Where any trade labours 
under a difficulty or grievance the Parhamentary Com- 
mittee should take no action until the matter has been 
brought before it by the central executive of the national 
union principally concerned. The Parhamentary Com- 
mittee would, however, on being approached by a national 
union, at once consult with the officers of that union and 
take expert advice as to the extent of the grievance, and 
the possibility and form of remedy. The remedy being 
decided on, formal proposals would be submitted to the 
Trade Union Congress, whose discussions would reveal 
any divergence of interest or poUcy among the unions. 
Congress having given its approval, a Bill would be drafted 
and a pohtical agitation commenced. 

At this stage the real usefulness of the Local Trades 
Councils appears. In matters of national pohtics these 
bodies should not attempt to frame Parhamentary pro- 
grammes. Their function is to explain and advocate 
locally the measures put forward by the Congress on behalf 
of the whole Trade Union Movement. The Parhamentary 
Committee should keep itself in close touch with the Local 
Councils, supplying them with all possible information 
regarding the work of the Congress, guiding and instructing 
them, and above all seeking their active co-operation. 

Apart from pohtical work of national scope the Trades 
Council has a wide local field of activity. It should, in a 
friendly spirit, assist as far as possible the work of the 
factory and mines inspectors, offering criticisms where 
necessary and taking effective steps to protest against 
abuse and neglect of powers. In such matters it might 
often be advisable to obtain expert advice and assistance 
through the staff of the Parhamentary Committee. Muni- 
cipal Pohtics would, of course, lie entirely within their 
sphere, and they would be perfectly free to frame their 
own programmes of reforms, and, where necessary, to 



call upon the Parliamentary Committee for support and 

The political functions of Trade Unions cannot, however, 
be restricted to the procuring of legislative measures for 
the protection of purely trade interests. The right to be 
heard, to be consulted, to have a point of view on all 
pohtical questions, domestic and imperial, cannot, without 
a denial of the democratic principle on which our govern- 
ment is based, be withheld from the body of wage-earners 
who constitute more than eighty per cent of the inhabitants 
of this country. Democracy is coming to mean more than 
the consent of the people to be governed ; it tends more 
and more to denote a form of government under which the 
first consideration of statesmen and pohticians must be the 
advancement of the interests of that class which includes 
far more of the King's subjects than any other class. 

There can be no other body of men in the kingdom 
better qualified than the leaders of the Trade Union 
Movement to give expression to the needs of the wage- 
earning class. Nor can there be any so well fitted to judge 
of the effectiveness of legislative measvures designed to 
benefit this class, or to draw attention to defects and 
abuses in administration. Housing Reform, the Liquor 
Traffic, the Factories, Mines, Railways, and Merchant 
Shipping Acts, Shop Hours, Truck, Arbitration and Con- 
ciliation, Wages Boards, the working of the Inferior 
Courts, Education, Unemployment, the Poor Law, and 
Popular Recreations and Amusements, are all matters in 
which society needs first-hand knowledge and guidance. 
To supply such knowledge and guidance to the House of 
Commons seems to be the special function of the Parlia- 
mentary Labour Party as distinct from the Trade Union 
Congress, and the successful working of the whole social 
organisation, no less than the protection of the industrial 
interests of the wage-earners, demands for that party a 
permanent place in our political system. 

In urging the necessity for direct Labour representation 
in Parliament, Trade Unionists are asking for no privilege 
that is refused to the other " interests " in the community. 
Railway, banking, and insurance companies, shipping 


companies, coal and iron companies, and innumerable 
other enterprises are already directly represented in the 
House of Commons by their chairmen, directors, 
trustees, managers, secretaries, and solicitors, whose 
salaries are admittedly fixed at sums sufficient to cover 
the expenses of election to and regular attendance in Parha- 
ment. More than a quarter of the members of the House 
of Commons are pohticians of this class. How then can it 
be improper for organisations of workmen to take steps 
to secure the return to Parhament of. men who, whSe 
discharging all their duties to their constituents, shall also 
watch over the interests of Labour, in the same way as 
these others seek to promote conunercial, manufacturing, 
and similar interests ? 

It is said that an injustice is done to the Liberal or 
Conservative Trade Unionist when the funds of his Trade 
Union are devoted to securing the return to Parhament 
of a person whose political views are opposed to his own. 
The weakness of this objection can best be shown by 
attempting to apply it to the case of the chairman of a 
railway company who sits in Parliament, and whose 
salary is avowedly calculated on a basis sufficiently wide to 
enable him to defray the expenses incidental to a Parlia- 
mentary seat. A Liberal shareholder in the company who 
objected to a portion of the company's income being 
spent in maintaining in Parhament a Conservative poUtician 
whose views he held in abhorrence would be told that it 
was necessary to have someone in Parhament to watch 
over the company's interests, and that so long as the 
company's representative faithfully and effectively repre- 
sented those interests, his pohtical views were, to the 
shareholders, a matter of indifference. Now the Trade 
Union member of Parhament is returned to Parhament 
and maintained there to promote the interests of Trade 
Unionists. But the constituency, no less than the Trade 
Union, has claims upon him, and if he discharges his 
obhgations to those who pay him, he must be free to 
represent the pohtical views of the majority of the electors 
in his constituency. After all, the Trade Union merely 
makes it possible for a Labour candidate to offer himself 


for election ; it is the constituency which elects him, and 
if the constituency demands a representative of a certain 
pohtical colour, the Trade Unionist of another colour has no 
real grievance. 



A MATTER of even greater importance than the 
-^ Parhamentary Representation of Trade Unions is 
raised by the Osborne case, for by the decision of the House 
of Lords in that case the constitution of the Trade Union 
has been virtually destroyed. Trade Unions which, hitherto, 
had been regarded as voluntary associations of individuals, 
free to do all that an individual may lawfully do, are by 
that decision declared to be corporate bodies formed under 
statute. But a corporate body created by a statute 
cannot lawfully do anything outside the purposes for 
which it has been incorporated by the statute. Therefore, 
as the Trade Union Acts of 1871 and 1876 constitute, to use 
the words of the Earl of Halsbury, the Charter of Incorpora- 
tion of Trade Unions, the purposes for which these bodies 
were incorporated are to be found in the definition of a 
Trade Union contained in the Act of 1876. 

According to this definition, a Trade Union is a com- 
bination for regulating the relations between workmen and 
masters, or between workmen and workmen, or between 
naasters and masters, or for imposing restrictive con- 
ditions on the conduct of any trade or business. A Trade 
Union is thus forbidden to engage in any form of activity 
which does not come within this definition, even though its 
members are unanimous in desiring it. At a single blow 
the educational work of Trade Unions, their activity in 
municipal affairs, their pohtical agitations, the sending of 
deputations to Parliament, and even their connection with 
local Trades Councils and the Trade Union Congress are 
declared illegal. 

A brief notice of the development of legal notions 
regarding corporations may be interesting as showing 



how the decision in Osborne's case was arrived at, and 
may, at the same time, be useful as indicating the 
direction in which a permanent solution of the difficulty 
may be found. In England, according to Blackstone, the 
King's consent is absolutely necessary to the erection of any 
corporation, though an implied consent is to be found in 
corporations which exist by force of the common law, to 
which our former kings are supposed to have given their 
concurrence, common law being nothing else but custom 
arising from the universal agreement of the whole com- 

Under the civil law of Rome corporations could be 
created by the mere act and voluntary association of their 
members, provided that their purposes were not contrary 
to law; to such a view the pressure of events in 
England is almost imperceptibly forcing Enghsh lawyers. 
In everyday hfe clubs, committees, groups, circles, 
societies, associations, unions, and combinations for 
educational, social, political, charitable, commercial and 
almost every conceivable purpose — all in reality corporate 
entities — are constantly, without any act of the Legislature, 
coming into being. These, though not always having the 
power to sue, and not always being under the liabihty 
to be sued in the Courts, nevertheless possess all the other 
essential characteristics of corporations, such as perpetual 
succession, common property, and a common will. 

It may even be urged that the various bodies enumerated 
come well within the scope of legal learning. A modem 
lawyer, Mr. C. T. Carr, in his Law of Corporations, at 
p. 119, writes as follows: " But besides the express author- 
isation given by the King, there were in the second place 
certain forms of indirect or conclusive authorisation. . . . 
The corporation by implication seems the frankest form 
of unwarranted and unlicensed assumption of corporate 
franchises. It has its counterpart in the de facto corpora- 
tion of America, and is a serious obstacle to a dogmatic 


At p. 123 he says : " Where a body of men had, 
almost from time immemorial, enjoyed and not abused 
collective privileges of great value, much hardship would 



have befallen such a body if it had been deprived of its 
corporate existence owing to the currency of new-fangled 
ideas about the royal prerogative. Thus the doctrine that 
corporations could exist without the authority of the 
King was of great value throughout the country and by 
its convenience justified its vogue.*' 

Though many Trade Unions are, as every student of 
Trade Union history knows, " bodies of men who, from 
time immemorial, have enjoyed and not abused collective 
privileges of great value," the excessive caution of English 
judges has caused them to refuse to Trade Unions the full 
status of corporations, though it has not prevented them 
from laying upon these bodies all the disabilities of corpora- 
tions. As was argued in the Taif Vale case, the only 
entities known to the common law as having the right to 
sue and the liabilitv to be sued were the individual and the 
corporation. The Legislature has, however, recognised the 
Trade Union, and has bestowed on it the capacity for 
owning property. This capacity for owning property and 
the necessity for acting by agents are the two essential 
qualities of a Trade Union which are also essential qualities 
of a corporation. For these reasons the Trade Union is 
now styled a quasi-corporation. 

Now in the olden times corporations were regarded as 
having most of the powers of ordinary citizens, and as being 
under the same obligations. But during the last seventy 
years these powers and obligations have been greatly re- 
stricted in the case of certain corporations by the birth and 
growth of the doctrine of ultra vires. " The doctrine of 
ultra vires," says Mr. Carr, ** has its special application to 
the corporations which have arisen under the Companies 
Acts. These bodies resemble partnerships, and the doctrine 
resembles the doctrine of partnership law. The limitation 
is in the interest of pubhc policy. Where a body is in- 
corporated to perform A, B, and C classes of acts, it 
cannot be permitted so to infringe the conditions of its 
incorporation as to perform X, Y, and Z classes of acts. 
Industrial enterprise is being more and more undertaken 
by corporations with transferable shares which the public 
is encouraged to buy. It is therefore more and more im- 





portant to have some guarantee that the concern in which 
members of the pubHc invest shall not make sudden and 
uncertain changes in its activity and objects. The pubhc 
is entitled to hold a registered company to its registered 

Having arrived at the conclusion that the self-constituted 
Trade Union is a quasi-corporation, the Courts apply to 
these self-constituted bodies this doctrine of ultra vires, 
a doctrine pecuUarly appHcable to joint-stock companies 
formed under the Companies Acts. The Earl of Halsbury 
speaks of the Trade Union Acts as a Charter of Incorpora- 
tion, declares that a Trade Union can do nothing that is 
not sanctioned by the Acts, and looks at the definition of a 
Trade Union contained in the Acts in order to determine 
what the purposes of a Trade Union are. 

The fallacy of the reasoning is obvious. Trade Unions, 
if indeed they be corporations, are not statutory corpora- 
tions but corporations by imphcation, which existed long 
before 1871 and which engaged in many activities of whicli 
no mention is made in the Trade Union Acts. These 
Acts gave legal recognition to Trade Unions and conferred 
upon them certain privileges. Bearing in mind that Trade 
Unionists had conducted a powerful agitation with a view 
to securing legal recognition, that the most enthusiastic 
leaders and defenders of the Trade Union Movement were 
called into consultation in the drafting of the Trade Union 
Acts, and that Mr. Thomas Burt, the representative of the 
Northumberland Miners, took a prominent part in passing 
them, it is inconceivable that the Acts would have received 
such support had they been intended to limit the activities 
of Trade Unions to the objects named in the definition. It 
is inconceivable that Mr. Burt would have voted for an 
Act which not only made illegal the payment of his own 
salary, but also rendered impossible the existence of 
Trades Councils and the Trade Union Congress, and put 
an end to the Trade Union practice of " lobbying " and 
other similar poUtical devices. 

It is far more reasonable to suppose that the promoters 
and supporters of the Acts took it for granted that Trade 
Unions were henceforth to pursue, within the protection 



of the law, that same course of action which they had 
hitherto pursued as associations lacking legal recognition. 
On such a view of the matter it clearly appears that the 
only purpose of the definition was to declare what t5q)es 
of associations were henceforth to enjoy the protection 
of the law while performing their accustomed functions. 
With those functions the law had no concern provided they 
were lawful. 

Whether Trade Unions are corporations directly created 
by statute, or, being self-constituted, are incorporated 
by implication, is now only a matter of academic interest, 
for even if the latter supposition be correct, no legislative 
act can restore them to that position in our social organisa- 
tion which they have hitherto naturally and spontaneously 
occupied. The disabilities laid upon them by the Osborne 
decision can only be removed by a legislative act specifi- 
cally conferring on these bodies powers to perform the 
various acts which experience has shown to he within the 
scope of the Trade Union purpose. Such specific powers 
being given by Parhament, the operations of Trade Unions 
will still be subject to the control of the Courts, which will 
inevitably apply to them the doctrine of ultra vires as 
they apply it to joint-stock companies and other cor- 

It would therefore seem that Trade Unionists must be 
prepared to put their organisations on the same plane 
as registered companies. The new Trade Union Act, if 
it is to deal with the problem in a thorough and permanent 
fashion, will enimierate or define the purposes, objects, 
and functions of Trade Unions, and perhaps their methods 
— this for the guidance of the Chief Registrar of Friendly 
Societies. A Trade Union applying to be registered may 
be expected to prepare a Memorandum of Association and 
Articles of Association in which its objects and methods 
are set forth, and which must be submitted to the Registrar 
for approval and registration. It should, however, in the 
same way as a registered company, be free to amend its 
Memorandum of Association from time to time. 

Under Section 9 of the Companies (Consohdation) Act, 
1908, a company may, by special resolution, alter the 




provisions of its Memorandum of Association with respect 
to the objects of the company, so far as may be required 
to enable it to carry on its business more economically or 
efficiently ; or to attain its main purpose by new or 
improved means ; or to carry on some business which, 
under existing circumstances, may be conveniently or 
advantageously combined with the business of the com- 
pany. The alteration is not to take effect until and 
except in so far as it is confirmed, on petition, by the Court. 
A similar power given to the Trade Union would prevent 
the Memorandum of Association from imposing ** hard 
and fast restrictive limits which might cramp the develop- 
ment and energies, and destroy the natural movements 
of the living organism." 



., >. 





Demy 9vo; Tenth Thousand; New Edition, with New Introductorj 
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Price 7s. 6d. net. 

This work describes, not only the growth and development of the 
Trade Union Movement in the United Kingdom from 1700 
down to the present day, but also the structure and working of 
the present Trade Union organisation in the United Kingdom. 
Founded almost entirely on material hitherto unpublished, it is 
not a mere chronicle of Trade Union organisation or record of 
strikes, but gives, in effect, the political history of the English 
working class during the last one hundred and fifty years. The 
opening chapter describes the handicraftsman in the toils of the 
industrial revolution, striving vainly to retain the mediaeval 
regulation of his Standard of Life. In subsequent chapters the 
Place Manuscripts and the archives of the Privy Council and the 
Home OfEce enable the authors to picture the struggles of the 
early Trade Unionists against the Combination Laws, and the 
remarkable Parliamentary manipulation which led to their repeal. 
The private records of the various Societies, together with 
contemporary pamphlets and working-class newspapers, furnish a 
graphic account of the hitherto undescribed outburst of *' New 
Unionism" of 1830-34, with its revolutionary aims and sub- 
sequent Chartist entanglements. The hidden influence of Trade 
Unionism on English politics is traced from point to point, new 
light being incidentally thrown upon the defeat of Mr. Glad- 
stone's Government in 1874. A detailed analysis is given of the 
economic and political causes which have, since 1880, tended to 
divorce the Trade Union Movement from its alliance with 
•* official Liberalism." A new introductory chapter brings the 
story down to the last few years. The final chapter describes the 
Trade Union world of to-day in all its varied features, including 
a realistic sketch of actual Trade Union life by a Trade Union 



1 .^ 


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In this work the authors of The History of Trade Unionism describe, 
with the systematic detail of the scientific observer, and in the same 
objective spirit, all the forms of Trade Unionism, Factory Legisla- 
tion, and other regulation of industry to be found within the British 
Isles. The employer in difficulties with his workmen, the Trade 
Unionist confronted with a new assault upon his Sundard Rate, the 
politician troubled about a new project for Factory Legislation, the 
public-spirited citizen concerned as to the real issues of a labour 
dispute, will find elucidated in this work the very problems about 
which they are thinking. It is a storehouse of authenticated facts 
about every branch of "the Labour Question," gathered from six 
years' personal investigation into every industry in all parts of the 
Kingdom ; systematically classified ; and made accessible by an un- 
usually elaborate Index. But the book is more than an Encyclo- 
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Government by Mass Meetings, Annual Elections, Proportional 
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executive officer. Those who regard the participation of a working- 
class electorate in the affiurs of government as the distinctive, if 
not the dangerous feature in modern politics, will here find the 
phenomenon isolated, and may learn how the British workman 
actually deals with similar issues in his own sphere. The intricate 
constitutions and interesting political experiments of the thousand 
self-governing Trade Union republics are dissected and criticised by 
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Edited, with Introduction, by Sidney and 

Beatrice Webb 

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Blvibooks, it hat been said, are placet of burial. The Report of the Royal 
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We do a great deaJ of State Doctoring in England—more 
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MAR 1 y 1953